Investors warm to rise in Dis-Chem revenue
Pharmacy group Dis-Chem says its business mounted a strong performance in the first five months of its second half, driven by an increase in group revenue of more than 10%.
The group worth R26bn on the JSE reported revenue growth of 12.2% for the period September 1 to January 28, from the previous comparable period. The expansion was driven by growth in its retail, whole and external businesses.
In response to the release of a trading update on Friday, the company’s share price rose the most in nearly four months, ending 3.53% ahead at R30.23.
Overall retail revenue was up 11.2% for the period and like-forlike revenue growth was 8.2%, while selling price inflation averaged 6.8%, indicating an increase in what it actually sold in real terms.
“During the period, DisChem maintained its position as SA’s largest retail pharmacy group by dispensary market share. The group experienced strong sales growth in its personal care and beauty category as well as in baby,” it said.
It has a base of 325 retail stores which consists of 271 DisChem Pharmacy outlets and 54 Dis-Chem Baby City stores.
The wholesale division experienced a revenue rise of 11%, with sales to its own retail stores up 9.4%.
External wholesale revenue from sales to independent pharmacies increased 24.8%, which was attributed to an increase in customer numbers and “supplemented by greater support from existing customers”.
In a note to investors CEO Rui Morais said: “In line with guidance provided at the time of announcing our interim results, the group continued to deliver [a] stronger second-half retail revenue performance through the festive period and into the fourth quarter.
“The wholesale business delivered notable revenue growth to external customers, driven by our differentiated service offering and new customers,” Morais said.
The seven strategic growth drivers announced in November 2023, aimed at delivering enhanced shareholder returns over the long term, “remain the group’s top priority. The steps taken to date have started unlocking the anticipated benefit, with momentum expected to accelerate into the 2025 financial year,” he said.
In January, Coronation took a commanding position in DisChem after the retailer’s founders sold shares worth R1.4bn to the asset manager. The move pushed Coronation’s holding in Dis-Chem from 24.3% to almost 30%.
Dis-Chem expects to report its full-year results to endFebruary on May 31.
WHOLESALE DELIVERED NOTABLE REVENUE GROWTH TO EXTERNAL CUSTOMERS, ON OUR DIFFERENTIATED SERVICE OFFERING