A bit pricey

Finweek English Edition - - Martketplace -

A solid set of half-year re­sults (for the pe­riod to 31 Au­gust) from Dis-Chem Phar­ma­cies. It saw first-half head­line earn­ings per share (HEPS) up 10.5% on the back of same-store growth of 3.5% and af­ter in­fla­tion real growth of 2.3%. The sin­gle exit price (SEP) in­crease ef­fec­tive 1 March 2018 was set at only 1.26%, which hurt growth as this had an im­pact on about a third of its re­tail sales. How­ever, with HEPS of 51.7c, and as­sum­ing it can be dou­bled to 103c for the full year, that’s a for­ward price-toearn­ings ra­tio (P/E) of some 27 times – and ex­pen­sive. It’s roughly the same P/E of Clicks – my pre­ferred of the two. Man­age­ment did state that Au­gust and Septem­ber sales had seen im­prove­ments, sug­gest­ing con­sumer con­fi­dence is slowly re­turn­ing. This could help boost the full-year HEPS, but I still sug­gest wait­ing for things to get cheaper if you want to own Dis-Chem.

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