Trading Day – Dischem revenue grows, Nedbank expects interest rate relief

Dis-Chem’s revenue for the year increased by 11.1% to R36.3 billion. The company saw an increase in retail revenue, which is partly attributable to the increase in Covid-19 vaccination and testing services.

Nedbank released a voluntary trading update in which it revised its 2024 economic growth outlook downward.

The company’s financial performance in the four months through April 2024 saw headline earnings growth of around mid-single digits, supported by strong growth in its Retail and Business Banking (RBB) segment and solid growth in Corporate and Investment Banking (CIB).

African Media Entertainment’s profit for the period increased by 46%, and its revenue increased by 8%. While the company’s radio broadcasting segment showed profitability, its media services and corporate segments generated losses.

Here is the biggest investment news of the day so far –

• Dis-Chem’s revenue increased by 11.1% from R32.7 billion to R36.3 billion. The company released its results for the year ended 29 March. Total net profit to shareholders decreased from R1 billion in the prior period to R984.5 million, a decline of 1.6%. Retail revenue grew by 9.7% to R31.7 billion, with comparable pharmacy store revenue growth at 6.9%. Retail revenue growth was impacted by Covid-19 vaccine administration and testing services in the prior period compared to the current period. The company said they are “satisfied with its performance during the period, specifically the strong second half where earnings before tax increased by 22.0%”.

• Nedbank’s economic unit revised its 2024 economic growth outlook downward from 1% GDP growth to 0.9%. The company released a voluntary trading update for the four months through April 2024. Nedbank expects mid-single-digit growth in its headline earnings compared to the prior period. It also expects 2024 inflation to be around 4.7%, with two interest rate cuts of 25 basis points each in the final months of 2024. “Generally, economic activity was weak, impacted by geopolitical uncertainty, high interest rates and high inflation,” it said. “Household finances remained under pressure as real incomes contracted and job prospects remained muted. Corporate activity was also weak, impacted by the uncertain political and economic environment.” Nedbank expects economic activity to remain weak before gradually improving into the second half of the year as inflation reduces further, “potentially enabling the SARB’s Monetary Policy Committee to start cutting interest rates”

• African Media Entertainment’s profit for the period increased by 46% to R63 million from R43 million in 2023. The media company has two core focus areas: radio assets, including Algoa FM and OFM, and digital media services, including United Stations, MediaHeads 360, Moneyweb, and the Central Media Group. The company released its results for the year ended 31 March 2024. Revenue increased by 8% to R290.1 million from R268.7 million in 2023. The company generated losses in both its media services and corporate segments and all of its R56.9 million operating profit was generated by its radio broadcasting segment. The company saw a major increase in investment income from R4.1 million in 2023 to R14.9 million, which boosted the net profit to shareholders from R41.3 million to R80.6 million. AME noted that operations throughout the various business units had varied performances during the year but expects the trading conditions for the 2025 financial year to stabilise.

It remains to be seen how these events will affect these companies and shareholders in the long term.