(Adds outcome specifics, industrial strike effect, share value reaction)
JOHANNESBURG, Might 16 (Reuters) – South African drugstore chain Dis-Chem Pharmacies Ltd’s complete-year earnings rose by significantly less than anticipated, the business stated on Thursday, as prolonged industrial action offset the effect of value cuts and aggressive promotions.
Dis-Chem stated headline earnings per share (HEPS) climbed to 85.four cents in the year ended February from 79.six cents per share a year earlier, but they nevertheless fell quick of an typical analysts’ estimate of 87 cents from Refinitiv I/B/E/S.
Headline EPS, which strips out specific one particular-off things, is the most broadly watched profit measure in South Africa.
“Unfortunately, the industrial action which started mid-November final year heavily impacted the group’s overall performance in the existing monetary period,” the firm stated in a statement.
This translated to slower retail income development of 9.7% to 19.six billion rand, with comparable retailer income development at three.four%. Wholesale income grew by 11.two% to 14.five billion rand.
Comparable retailer income was hurt by competitive pricing across the individual care and infant sectors, and by a Division of Overall health selection to implement only a modest rise in the maximum value Dis-Chem is permitted by law to charge for some merchandise.
At 0718 GMT, shares in Dis-Chem have been down three.four % at 26.60 rand.
About two,300 Dis-Chem staff belonging to the National Union of Public Service and Allied Workers (NUPSAW) went on a national strike from November till April, demanding amongst other issues a rise in the minimum wage.
Dis-Chem, which competes with Clicks Group, stated as a outcome of the strike it incurred direct expenses of 50.four million rand and indirect expenses of involving 22.three million rand and 26 million rand. ($1 = 14.2436 rand) (Reporting by Nqobile Dludla editing by Gopakumar Warrier and Jan Harvey)