Big earnings boost for Dis-Chem

In its results for the year ended 28 February 2025, the group said it has made solid progress on eight strategic areas to deliver sustainable shareholder value.

Effective cost management was the largest contributor to earnings growth during this period, especially payroll costs.

It added that the successful deployment of its staffing framework 1.0 contributed to positive operating leverage, with operating profit growth of 18.3%, ahead of group revenue growth of 8.0%.

Basic earnings per share and headline earnings per share both increased by 20.0% to 137.6 cents and 137.5 cents per share, respectively.

The group’s total dividend per share was also increased by 19.9% to 45.74 cents per share.

However, when excluding a once-off gain associated with the acquisition of a Midrand warehouse, headline earnings increased by 12.3%.

The group’s retail revenue grew by 5.9% to R33.6 billion, with comparable pharmacy store revenue growth at 4.1%.

Net store changes included the opening of 20 and closure of 3 retail pharmacy stores and a net nine baby stores closures.

The group’s footprint stood at 285 retail pharmacy stores and 45 retail baby stores at the year-end.

The group’s wholesale revenue increased by 9.9% to R30.1 billion, with wholesale revenue to its retail stores still being the most significant contributor, and grew 7.4%.

External revenue to independent pharmacies and The Local Choice (‘TLC’) franchises grew by 22.1% compared to the prior period.

The independent pharmacy growth of 22.7% was attributable to new customers and increased support from the current base.

TLC growth was 21.2% due to a combination of an increase in TLC franchise stores from 205 to 240 and increased supply chain support from existing TLC franchisees.

Total income grew by 9.2% to R12.1 billion, with the group’s total income margin increasing slighlty from 30.7% to 31.0%.

The group’s retail income grew by 7.9%, with the retail margin increasing from 29.7% to 30.3% over the comparable period.

“The increase in retail total income margin was predominantly due to an increase in transactional gross margin across dispensary, personal care, beauty and healthcare,” said the group.

Outlook

The group also expects the consumer to remain constrained due to the current economic climate.

As per its plan to reach its three-year target of 137,000 sqm, it will continue accelerating its space, identification and new store openings.

Including the nine new stores already trading in FY2026, a total of 39 retail pharmacy stores are planned for the year.

The group will also rework its online retailing and healthcare buildings, starting with the complete revamp of digital channels. 

Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/business/826157/big-earnings-boost-for-dis-chem/