Skip to main content

Dis-Chem’s profit falls 39% as strike costs bite

| Retailer trading results

The pharmacy group Dis-Chem saw its revenue grow by 13% to R11.8bn in the six months to end-August – still, its profit declined by a large margin due to costs related to a months-long strike that started at the end of 2018.

Its headline earnings fell by 39% as its expenses climbed over the six months due to strike-related costs, including additional security. Its profit was also dented by a change in the group’s bonus policy: previously it expensed the full bonus amount when paid in December of each year. The bonus is now evenly accrued throughout the financial period.

 

In addition, its net finance costs increased by almost 21% to R202 million.

“The Group took advantage of favourable financing by replacing the existing Absa facility with a new facility in order to facilitate the recent acquisitions in both the retail and wholesale businesses,” Dis-Chem said.

Prices at its 158 stores rose by 2.3% compared to the same period last year. The group opened 20 new stores, and bought two pharmacies, over the past six months. Its loyalty members now total 5.1m.

While Dis-Chem warned that “the consumer will continue to remain constrained as a result of the current macroeconomic environment”, it said it its “resilient markets” and brand will afford it some protection.

It is focused on adding more stores, and have opened four shops since the start of September, with seven more planned before February 2020.

“The labour issues that led to strikes across two consecutive financial years have been settled and we are actively rebuilding the relationship with distribution staff so that they understand the culture of our brand and our commitment to values that I, together with my partners, have built over many years,” CEO Ivan Saltzman said in a statement.

Dis-Chem's share price took a large knock on Monday after the company issued a profit warning on Friday evening. The share price is down 23% over the past year.

 

Pin It

Related Articles

Positive growth continues for The SPAR Group

SPAR Group turnover increased by 8.8% for the 24 weeks ended 15 March 2024, with a well-maintained policy of continued capital investment  across the wholesale and retail value chain.

Unaudited results for the 26 weeks ended 31 Dec...

Double-digit growth sees half year sales reaching R121 billion - Group sale of merchandise increased by 13.9% to R121.1 billion - Supermarkets RSA sale of merchandise increased by 14.6% to R97.5 billion - Diluted headline earnin...

Woolies online sales skyrocket — but still weak...

By: Staff Writer - MyBroadband South African fashion, home, and grocery retailer Woolworths saw online sales surge during the first half of its 2024 financial year. For the 26 weeks ending 24 December 2024, online sales in the fashion, beauty an...

Shoprite first-half sales rise 14%

By Andries Mahlangu - BusinessLive Africa’s biggest grocery retailer Shoprite reported robust growth in sales in the six months ended December, with all its various store formats coming to the party save for its furniture business.  It...

Port chaos and bird flu hit Woolworths sales

  By: Nick Wilson – News24 Shares in Woolworths fell nearly 2% on Tuesday morning after it warned that SA's sputtering economic growth, a bird flu epidemic, and port chaos contributed to volume declines in its local food and fashion busines...