Dischem FY HEPS rise 11.8%
Dischem came out with results today, for the year ended February. The healthcare company reported an 11.8 per cent rise in headline earnings per share. The various restrictions during each level of lockdown dramatically changed shopping behaviour and led to significant online sales growth of 260.7 per cent. The group also embarked on strategic acquisitions during the period. Rui Morais, Chief Financial Officer at Dis-Chem joins CNBC Africa for more.
Fri, 21 May 2021 17:05:38 GMT
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AI Generated Summary
- Dischem reports an 11.8% increase in headline earnings per share for the year ending February, driven by a surge in online sales amid the COVID-19 pandemic.
- The company reinstates dividends with a notable 148% increase, signaling confidence in its financial stability and growth prospects.
- Dischem's strategic acquisitions, totaling one billion rand, are aimed at diversifying retail revenue streams and accessing higher-margin segments like the baby products market.
Dischem, a prominent healthcare company, has recently released its financial results for the year ending February, showcasing an impressive 11.8% increase in headline earnings per share compared to the previous year. The COVID-19 pandemic and the subsequent lockdowns have significantly altered consumer shopping behaviors, leading to a remarkable 260.7% growth in online sales for the company. Despite facing challenges such as trading restrictions, a non-existent flu season, and COVID-19 related expenses, Dischem has managed to navigate through these turbulent times and emerge with strong financials. Rui Morais, the Chief Financial Officer at Dischem, sat down with CNBC Africa to discuss the company's performance and future outlook. One of the key highlights of Dischem's financial report is the reinstatement of dividends, with a 148% increase from the previous comparable period. This move signals a positive outlook for the company, but Morais remains cautious about the future, stating that it's 'too early to say' if the worst is over for the business. He acknowledges the challenges faced during the different lockdown levels but expresses optimism about the gradual normalization of shopping patterns post-lockdown. Despite being classified as an essential service during the lockdowns, Dischem did witness certain pressure points, including market share losses in the initial stages. However, as restrictions eased, the company saw a resurgence in market share and an increase in the frequency of shopping trips, indicating a return to pre-COVID levels. The company's prudent financial management is evident in its reduced debt and declining financing costs, reflecting a sustainable approach towards managing cash flow. Dischem has invested significantly in strategic acquisitions, totaling about one billion rand. The rationale behind these acquisitions is to diversify the company's retail revenue streams and gain access to higher-margin segments. Morais highlights the importance of these acquisitions in expanding the company's presence in resilient categories like the baby products market. Looking ahead, Dischem remains focused on strategic investments and managing its expansionary capex amidst the uncertainties brought about by COVID-19. The company's active involvement in the South African COVID-19 vaccine rollout is a testament to its commitment to public health. With dedicated vaccination centers and plans to vaccinate up to 800,000 people per month, Dischem is playing a crucial role in the country's vaccination drive. As South Africa braces for a potential third wave of COVID-19 infections, consumer spending remains a key concern. Morais acknowledges the challenges posed by the evolving situation but remains cautiously optimistic, citing a 'normalization of shopping behavior' and the psychological impact of vaccination on consumer confidence. While uncertainties loom, Dischem's resilient performance, strategic acquisitions, and active participation in the vaccination drive position the company well for the future.