Dischem profit slumps, cuts dividend

Dischem announced today that, despite strong revenue growth, the company’s profit for the year dropped by over 16%.

Dischem released its results for the six months through August 2023, which revealed mixed results for the retailer.

Despite a 9.4% growth in revenue, Dischem’s earnings decreased significantly in the reporting period.

Basic earnings per share and basic headline earnings per share are 58.3 cents and 58.2 cents per share, respectively. This represents a decrease of 16.7% and 17.2%, respectively.

Combined with a 9.4% growth in expenses, this saw the company’s profit for the year drop to R518.44 million from R623.29 million the year before – a 16.8% decrease.

Dischem said it is satisfied with its performance during the period, “notwithstanding a tough trading environment”. 

“The constrained economic environment, higher interest rates and costs associated with load-shedding have resulted in a weaker performance by the group over the prior comparative period.” 

“In the current financial year, the Group has also been impacted by the base effects of the prior year’s performance, which were distinctly different across the two halves of the year.” 

The first half of the prior year delivered a strong performance when compared to the second half of the last year, the retailer said. 

However, Dischem said it expects a more equal distribution of earnings across halves in the current financial year. 

The acquisitions of the warehouse properties resulted in a R72 million once-off gain from the release of the lease liability and right-of-use asset, which contributed to the stronger first-half performance in the prior year.

Dischem declared a gross interim cash dividend of 23.24 cents per share – a decrease of 17.3% from the comparable period.