You are currently viewing our desktop site, do you want to visit our Mobile web app instead?
 Registered users can save articles to their personal articles list. Login here or sign up here

Dis-Chem annual profit misses estimates

As prolonged industrial action offset the impact of price cuts and aggressive promotions.

Drugstore chain Dis-Chem Pharmacies’s full-year earnings rose by less than expected, the company said on Thursday, as prolonged industrial action offset the impact of price cuts and aggressive promotions.

Dis-Chem said headline earnings per share (Heps) climbed to 85.4 cents in the year ended February from 79.6 cents per share a year earlier, but they still fell short of an average analysts’ estimate of 87 cents from Refinitiv I/B/E/S.

Headline EPS, which strips out certain one-off items, is the most widely watched profit measure in South Africa.

“Unfortunately, the industrial action which began mid-November last year heavily impacted the group’s performance in the current financial period,” the firm said in a statement.

This translated to slower retail revenue growth of 9.7% to R19.6 billion, with comparable store revenue growth at 3.4%. Wholesale revenue grew by 11.2% to R14.5 billion.

Comparable store revenue was hurt by competitive pricing across the personal care and baby sectors, and by a Department of Health decision to implement only a small rise in the maximum price Dis-Chem is allowed by law to charge for some products.

At 0718 GMT, shares in Dis-Chem were down 3.4% at R26.60.

About 2 300 Dis-Chem employees belonging to the National Union of Public Service and Allied Workers (NUPSAW) went on a national strike from November until April, demanding among other things a rise in the minimum wage.

Dis-Chem, which competes with Clicks Group, said as a result of the strike it incurred direct costs of R50.4 million and indirect costs of between R22.3 million and R26 million.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE





Follow us:

Search Articles:Advanced Search
Click a Company: