JOHANNESBURG, June 5 (Reuters) - Shares in South African fashion retailer Mr Price jumped almost 15% on Friday, as a steady dividend and easing concerns over its NKD acquisition buoyed sentiment, even as annual earnings rose only a modest 2.4%.

Mr Price reported a 2.4% rise in diluted headline earnings per share (DHEPS) to 14.11 rand in the 52 weeks ended March 28, with growth partly constrained by a 217 million rand one-off cost linked to its acquisition of Germany-based discount retailer NKD Group. 

On a normalised basis, excluding the one-off costs, DHEPS rose by 8% to 14.89 rand.

Group retail sales grew 4.3% to 41.1 billion rand, with comparable store sales growth of 1.1% against a backdrop of constrained consumer discretionary spending. The gross profit margin expanded 70 basis points to 41.2%, with all business units reporting gains.

Rand Swiss senior analyst Shaun Murison said the results were strong against a tough comparable period.

"The NKD acquisition had been a significant source of anxiety for investors, and with transaction costs stripped out as a once-off and management confirming the deal closed with guided forecasts intact, a good portion of that risk discount has now been unwound," he added.

A continued 63% dividend payout ratio was also a sign of management's confidence, Casparus Treurnicht, portfolio manager at Gryphon Asset Management, said.

Shares were 14.8% higher at 172 rand by 1211 GMT, the highest since March 11.

SHIPPING COSTS FIXED

While the value-focused retailer has no direct exposure to the Middle East, it was wary of the knock-on effects of a prolonged conflict on consumer demand, CEO Mark Blair told investors.

He added that supply chains have proved resilient so far, with no significant delays to stock flows, although higher fuel prices have pushed up costs in the group's local logistics network. The impact has been partly offset by an improving exchange rate.

"When you're looking at the shipping rates, we've had really good negotiations so we've actually fixed our pricing out to December and those are really good rates," Blair said.

(Reporting by Nqobile Dludla, additional reporting by Lulah Dube; Editing by Kim Coghill, Kirsten Donovan)

By Nqobile Dludla