Following plunge in headline earnings and final dividend
Dis-Chem, Green valley in Greenstone, 18 October 2022. Picture: Neil McCartney / The Citizen
Pharmacy and healthcare group Dis-Chem missed some analysts’ projections of growth in earnings for the 12-months ended 28 February 2026, after earnings per share (EPS) and headline earnings per share (Heps) fell by double digits.
This, together with a major decline in its dividend payout, saw its share price slide on Friday, closing almost 8% down to just below R35 a share.
Releasing its annual results on Sens, the group reported a 17% plunge in Heps, down to 113.7 cents from 137.5 cents in the previous year. The company declared a final dividend of 15.92 cents, which plunged almost 43% from the prior period. Its total dividend per share for the year was over 17% lower.
This is despite generating strong revenue performance in an environment where consumers continue to be financially constrained, as well as improving total income margin and gaining market share across all core retail categories.
Group revenue increased by 9.3% to R42.8 billion, while retail revenue grew by 9% to R36.6 billion with comparable pharmacy store revenue growth at 5.3%.
Dis-Chem says net store changes included the opening and acquisition of 31 retail pharmacy stores and three baby store closures, resulting in a footprint of 316 retail pharmacy stores and 42 retail baby stores at year end.
Rewards
For the 17-week period since the launch of its Better Rewards programme, the group says revenue increased by 9.6% compared to the corresponding period.
Retail revenue growth of participating Better Rewards brands increased by 12% compared to the corresponding period.
“The consistency of an always-on, health-relevant, lowest priced basket is driving increased shopping frequency,” Dis-Chem said.
Expenses were up 13% during the period under review, with store expansion and innovation resulting in a 15.7% jump in retail expenses. Retail employment costs, when excluding the investment in X, bigly labs (Dis-Chem’s Centre of Excellence or ‘innovation engine’), increased by double digits.
Outlook
“The revenue growth, market share gains and improved total income margin, highlights the sustainability of the Better Rewards program [sic] and the importance of this program in driving positive operating leverage and strong future earnings growth,” the group said.
But it again warned that it “expects that the consumer will remain constrained due to the current economic climate and increase in fuel prices”.
This article was republished from Moneyweb. Read the original here.
