Company news in brief

Dis-Chem delivers double-digit earnings

Dis-Chem reported on Friday that it had delivered double-digit growth in full-year earnings and dividends, gaining market share in the process, even as its diesel expenses to mitigate load shedding soared by nearly two-thirds.

The JSE-listed pharmaceutical retailer said the performance was driven by a normalisation of shopping behaviour post-Covid-19, but warned of tough times ahead as consumers came under increasing pressure in a constrained economic environment.

The company said its earnings per share and headline earnings per share for the 12 months to 28 February 2023 had increased by 17.2% and 17.4% respectively to 116.3c and 116.5c per share, while group revenue rose 7.4% to R32.7 billion. Excluding Covid-19 vaccines and testing, group revenue came in 9% higher.

The company's retail revenue grew by 6.5% (8.4% when excluding Covid-19 vaccines and testing) to R28.9 billion, with comparable store revenue growth of 3.3%. It declared a final dividend of 18.5 cents per share, which brought its total dividend to 46.6c for the year, a 17.3% on the same period in the previous year.

Dis-Chem opened a total of 13 retail pharmacy stores and eight retail baby stores during the period under review, while 12 Baby Boom stores were also acquired. It said that as at February 2023, it had 258 retail pharmacy stores and 54 retail baby stores.

The company's wholesale revenue grew by 10.4% to R24.2 billion, with wholesale revenue growth for its own retail stores at 9.6%, and external revenue for independent pharmacies and The Local Choice franchises up by 7.7% and 23.9% respectively. – Fin24



Nampak slumps after loss warning

Nampak's share price fell more than 12% in opening trading on Friday morning after Africa's largest packaging group warned that it anticipates a loss in the six months to end March.

The company said in its trading statement that it expects a headline loss per share of between 53.0c and 58.0c for the period, down from earnings of 35.6c in the corresponding previous period. This is due to higher net finance costs, impairment losses, and devaluation losses arising from Angolan and Nigerian exchange rate movement.

Friday's slump, which recovered slightly to a 9.5% drop by 10:15, follows a similar loss warning in March, which resulted in a 15% fall. The company is down nearly 38% since January, and is down over 77% since May 2022.

Nampak is struggling under the weight of a debt pile that stood at a net R5.2 billion at the end of September. It has also been trying to convince shareholders to back a rights issue that will potentially be more than twice its current market value.

It said in Friday's trading update that negotiations around its refinancing package for the next five years are progressing, with an anticipated conclusion date of 15 June 2023.

"These negotiations, together with the group’s progress in terms of the implementation of the restructuring plan, will determine the size of the required rights offer, which will be announced in due course as part of Nampak’s ongoing shareholder updates." – Fin24