Retail group Dis-Chem has reported a 16.3% increase in headline earnings per share (HEPS), a key measure of profit, for the six months ending in August, as its expansion strategy pays off.
Dis-Chem also reported a 9.6% revenue increase, bringing the group’s revenue to R19.6bn in the period.
Dis-Chem’s retail segment reported a 7.1% revenue increase to R16.7bn. Comparable pharmacy store revenue increased 4.8%, with seven new retail pharmacy stores opened during the period, bringing the total retail pharmacy stores to 274 and 53 baby stores.
The group’s wholesale segment saw a 10% increase in revenue to R15bn. Dis-Chem said the growth could be attributed to a surge in demand among independent pharmacies and The Local Choice (TLC) franchises.
Sales to external customers grew 26.6% as more independent pharmacies partnered with Dis-Chem’s efficient supply chain solutions, the group said. This increase in partnership support led to the growth of TLC franchise network, which expanded from 205 stores in February to 221.
CEO Rui Morais attributed the performance to a focused strategy that aimed to deliver sustainable shareholder value. A key factor behind the earnings increase, according to Morais, was the containment of payroll costs through a newly implemented staffing framework.
“Following the identification of the eight strategic areas of focus aimed at delivering sustainable shareholder returns, the group has made pleasing progress in each of these areas,” he said.
“This delivered positive operating leverage, with operating profit growing at 17.5% ahead of group revenue growth of 9.6%.”
Dis-Chem said it planned to expand its retail footprint by an additional 137,000m2 over the next three years. The group would open 13 new pharmacy stores by the end of this financial year, four of which are already operational, it said.
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