A bit pricey
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.