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Dis-Chem reported on Friday that it had delivered double-digit growth in full-year earnings and dividends, gaining market share in the process, even as its diesel expenses to mitigate load shedding soared by nearly two-thirds.
The JSE-listed pharmaceutical retailer said the performance was driven by a normalisation of shopping behaviour post-Covid-19, but warned of tough times ahead as consumers came under increasing pressure in a constrained economic environment.
The company said its earnings per share and headline earnings per share for the 12 months to 28 February 2023 had increased by 17.2% and 17.4% respectively to 116.3c and 116.5c per share, while group revenue rose 7.4% to R32.7 billion. Excluding Covid-19 vaccines and testing, group revenue came in 9% higher. The company's retail revenue grew by 6.5% (8.4% when excluding Covid-19 vaccines and testing) to R28.9 billion, with comparable store revenue growth of 3.3%. It declared a final dividend of 18.5 cents per share, which brought its total dividend to 46.6c for the year, a 17.3% on the same period in the previous year.
Departing CEO Ivan Saltzman, who is stepping down from the top position at the end of June after more than four decades at the helm, said the company had "produced a solid set of results in a tough trading environment".
He said that apart from the gains in the dispensary segment, the group had also achieved market share gains in the "healthcare and medical, and baby categories".
But Dis-Chem also sounded a note of caution about the rising costs of keeping the lights on during intensifying load shedding, saying the "unavoidable increase in operational costs will continue to impact earnings". During the year under review it had forked out R91 million on diesel, a 65% increase over the corresponding period.
Fortunately for the company its "strategic early investment in generator capacity" had "resulted in minimal disruption" to trading.
At the same time, it expected the consumers to continue to "experience financial hardship".
Dis-Chem opened a total of 13 retail pharmacy stores and eight retail baby stores during the period under review, while 12 Baby Boom stores were also acquired. It said that as at February 2023, it had 258 retail pharmacy stores and 54 retail baby stores.
The company's wholesale revenue grew by 10.4% to R24.2 billion, with wholesale revenue growth for its own retail stores at 9.6%, and external revenue for independent pharmacies and The Local Choice franchises up by 7.7% and 23.9% respectively.
