Dis-Chem reports huge increase in revenue
DURBAN - DIS-CHEM Pharmacies yesterday reported double-digit growth of 12.1 percent in group revenue to R11.6 billion for the 22 weeks to February 2, with online sales surging 218 percent despite the Covid-19 second wave disrupting the business.
Dis-Chem said the increase in online sales was a result of consumers preferring to stay safe and shopping from the comfort of their homes as new Covid-19 infections climbed towards the end of last year.
The group said its retail revenue increased 10.3 percent to R10.4bn despite the weak macro environment, but the group continued to gain market share in all its core categories.
It said healthcare, vitamins and chronic drug sales reported remarkable growth as consumers continue to focus on preventative healthcare.
Dis-Chem said that like-for-like revenue growth and selling price inflation were 5.1 percent and 3.6 percent, respectively.
Chief executive Ivan Saltzman said the group was are in a fortunate position in that they can continue to
provide their customers with quality service, competitive prices and an extensive range of products during these very challenging times.
“The group continued to show its resilience as the country experienced the second wave of the Covid-19 pandemic.
“The change in consumer shopping behaviour due to Covid-19 continued to impact our sales mix and in turn, our margins,” Saltzman said. “Despite the strong top-line growth, margins are still lagging pre-Covid-19
levels. We welcome the recently gazetted single exit price (SEP) increase of 3.68 percent.”
Saltzman said Dis-Chem increased its store network by 10 new stores and they contributed R123 millon to revenue.
“Our new stores continue to trade above our expectations, validating our site selection method.
“In addition, we opened two DisChem Pharmacies on Mediclinic sites on February 1, 2021 and closed one underperforming store,” he said.
“We now have a store base of 193 stores, excluding Baby City.”
Saltzman said the group acquired 33 newly-acquired Baby City stores, which contributed R73.4m to retail revenue from the beginning of January, the date from which the transaction became effective, to February 2, 2021.
He said the group’s wholesale revenue grew 20 percent to R8.6bn, with sales to its retail stores increasing 18.5 percent.
Saltzman said the group’s external customers sales growth of 30.6 percent was driven by its growing distribution network and greater support from The Local Choice (TLC) and independent pharmacies which grew by 30.4 percent and 30.8 percent respectively.
Dis-Chem has 117 TLC franchise stores compared to 110 during the same period last year.
The group expects to release its results for the year to end February on May 21.
Dis-Chem rose 1.8percent on the JSE yesterday to close at R23.69.