Dis-Chem interim results August 2018
Revenue from contracts with customers increased by 9.4% to R10.465 billion (2017: R9.569 billion), gross profit rose 9.9% to R2.607 billion (2017: R2.371 billion), operating profit climbed 8.3% to R705 million (2017: R651 million), profit attributable to equity holders of the parent was higher at R445 million (2017: R402.9 million), while headline earnings per share grew to 51.7 cents per share (2017: 46.8 cents per share).
A gross interim cash dividend of 20.69678 cents per share, in respect of the interim ended 31 August 2018 has been declared based on 40% of headline earnings.
For the six weeks to 14 October 2018, Group revenue grew by 10.3% with comparable store revenue by 3.3%. The Group expects that the consumer will continue to remain constrained due to the continuing increase in the fuel price and overall cost of living. As was the case previously, the resilient markets in which the Group operates will offer protection against the weak environment; the Group is well positioned to benefit from additional consumer disposable income.
The Group remains focused on adding retail stores. Two stores have been added since the reporting period and an additional 13 store openings are planned through to February 2019. We reiterate our guidance to end the full year with a minimum of 151 stores.
Earnings guidance for FY2019
Referring to the trading update on 19 July 2018, the Group expects full-year earnings per share ("EPS") to be between 92.3 cents and 98.7 cents implying an increase of between 16% and 24%, compared to the EPS of 79.6 cents for the 12 months ended 28 February 2018. Earnings growth is expected to improve in the second half of the financial year as the benefits of the higher SEP granted in March 2017 predominantly impacts the base for the interim results to 31 August 2018.
We continue to expect to break even at an EBITDA level in the Wholesale division for the FY2019 period. This will be driven by additional scale on the back of internal and independent pharmacy sales growth as we access new markets as a result of our newly invested warehouse space. Additionally, cost efficiency remains a focus as we now have wholesale operations that are more geographically aligned with our retail store base and the independent pharmacy market that we intend to access.