Dis-Chem announces strong H1 revenue growth

Dis-Chem, a leading pharmacy group in South Africa, has reported strong financial results for the first half of the year, with revenue up by 16.6% to R14.9 billion and headline earnings per share increasing by 35.3%. The company's share price climbed by more than 5% following the release of these impressive numbers. During a recent interview with CNBC Africa, Dis-Chem CEO Rui Morias discussed the company's growth strategy, acquisition plans, store expansion, and response to the COVID-19 pandemic. Morias highlighted the importance of good cash generation in financing the company's acquisition trail. He mentioned that Dis-Chem's dividend policy, which accounts for around 40% of headline earnings, was designed to accommodate potential acquisitions. Despite strong earnings, the company has continued to adhere to its dividend policy while also considering financing options for future growth opportunities. The CEO emphasized that each segment targeted by Dis-Chem presents different opportunities for expansion. The company's recent acquisitions, including Medicare and Kylo, have provided entry points into new markets and product offerings. Morias discussed the potential for further acquisitions in the primary health care sector to deliver quality care to uninsured South Africans. With over 200 stores now in operation, Dis-Chem plans to open additional outlets in the coming months. The company aims to open seven new discount stores in the second half of the financial year, in addition to integrating the recently acquired Medicare pharmacies. Looking ahead, Dis-Chem plans to add 20 to 25 new stores annually under the Dis-Chem brand, with further expansion opportunities in the baby care segment. Addressing the company's response to the COVID-19 pandemic, Morias commended the efforts of Dis-Chem employees in setting up testing centers and supporting vaccination efforts. While the company has not mandated vaccinations for employees, Morias stressed the importance of health education and awareness to encourage vaccination uptake. Dis-Chem has administered close to 900,000 vaccines and remains committed to supporting the government's vaccination drive. Overall, Dis-Chem's focus on strategic acquisitions, store expansion, and proactive response to the pandemic reflects its commitment to driving growth and delivering quality healthcare services to the South African market. The company's strong financial performance and expansion plans position it well for future success in the competitive pharmacy sector.