Dis-Chem revenue up almost 10%, resumes dividend

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  • Dis-Chem has increased its revenue by 9.6% to R26.3 billion for the year. 
  • While the absence of a flu season hit over-the-counter sales, increased health awareness during the pandemic boosted chronic medicine sales.
  • The company resumed its dividend after no payouts in the previous financial year.

Pharmaceutical retailer and distributor Dis-Chem has seen its revenue grow by almost 10% to R26.3 billion for the year to end-February.

Its retail division grew revenue by almost 8% to R23.4 billion, while its wholesale business, which also supplies independent pharmacies, grew revenue by 16% to R19.3 billion.

The group says its over-the-counter sales were affected by a decline in cold and flu cases compared to previous years due to social distancing, increased sanitising measures, people working from home and children not going to school.

But increased health awareness amid the pandemic, and strong adherence to chronic drugs, helped to offset the impact of the weaker demand for flu medicine.

After not declaring a dividend last year, to preserve cash during the pandemic, the company has now resumed payouts. It declared a final cash dividend of 31.1c per share.

Since this week, Dis-Chem has started vaccination over 60s and health-care workers. 

Additional capacity from in-store clinics will be added when the Johnson & Johnson vaccination becomes available. Dis-Chem hopes to administer up to 800 000 vaccines a month in time. 

"Based on valuable learnings, and subject to availability of vaccines, we will evaluate vaccinating from our in-store clinics, which will add further capacity of up to 7 500 vaccines per day," said  said Ivan Saltzman, CEO of Dis-Chem.

Dis-Chem said it suffered costs directly related to Covid-19 which amounted to R56.6 million over 12 months.

For its year ended 28 February results, the group said on Friday the largest cost incurred was for vouchers valued at R23.5 million that it distributed to all staff as a gratuity for their commitment to the front-line fight against the pandemic.

Dis-Chem's share price fell by 8c to R27.50 by midday on Friday.

Dis-Chem announced its interest in acquiring 25% of Kaelo, a company that houses a complementary portfolio of health assets, including benefit-rich gap and primary health insurance for a purchase consideration of up to R195 million. The transaction was recently filed with the Competition Authorities as a large merger.

Twenty-two new retail stores were opened, including three stores in Mediclinic hospitals, and it opened two new pharmacies during the year. The retailer had 194 stores by the end of February 2021.

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