Dis-Chem, a leading pharmacy group in South Africa, reported lower half-year headline earnings per share and cut its interim dividend as expenses grew faster than revenue. The company's headline earnings per share fell 12.8% to 64.3 cents in the six months ended 31 August 2026. This decline was recorded despite an 8% increase in group revenue to R23 billion. The figures were released on Thursday, 29 October 2026.
The pharmacy group declared a gross interim dividend of 25.62 cents a share, down 12.9% from the comparable period. This decrease was attributed to a 12.1% increase in expenses, which outpaced revenue growth. Higher spending on stores and the company's X, bigly labs technology unit contributed to the increased expenses. Notably, start-up investment costs in the technology unit doubled during the half-year period.
Dis-Chem expanded its retail presence by opening 14 new retail pharmacies during the half-year. This brought the total number of pharmacies in its network to 328 stores at the end of August. Retail revenue increased 8.2% to R19.6 billion, while comparable pharmacy-store revenue rose 3.4%. The company attributed the growth in retail revenue to its expanded store network and improved sales performance.
The company's subsequent trading update showed group revenue growth of 7.9% for the seven weeks from 1 September to 19 October. However, this outlook commentary has not been audited or reviewed by its independent auditor. This update provides insight into the company's recent trading performance and its expectations for future growth.
Dis-Chem's financial performance was impacted by increased investment in its stores and technology unit. The company's strategy to expand its retail presence and invest in technology is expected to drive future growth. However, the increased expenses and decline in headline earnings per share highlight the challenges faced by the company in achieving profitability.
The dividend is scheduled for payment on 23 November, with the share register closing on 20 November. Shareholders will receive the reduced interim dividend, reflecting the company's current financial performance. The payment and closure dates are critical for investors and shareholders who rely on the dividend income.
Dis-Chem's financial results reflect the challenges faced by the retail pharmacy sector in South Africa. The company's performance is influenced by various factors, including consumer spending, competition, and regulatory changes. Despite the decline in headline earnings per share, Dis-Chem's revenue growth and expanded store network position it for potential future growth.
Key points
- Dis-Chem's headline earnings per share fell 12.8% to 64.3 cents in the six months ended 31 August 2026.
- The company's group revenue rose 8% to R23 billion during the same period.
- Dis-Chem opened 14 new retail pharmacies during the half-year, taking its total pharmacy network to 328 stores.
