Dis-Chem expects huge increase in earnings

Dis-Chem expects to report a huge increase in earnings due to higher margins and a gain in pharmacy market share. Earnings per share (EPS) is expected to increase between 43% and 46% to around R0.70.

US markets had a strong day on Friday, as the S&P 500 climbed 2.4% to close the week in the green by 2.9%. The Nasdaq rose 2.3% to close the week 2.7% higher.

The Nikkei 225 opened strong this morning on the back of this news before paring back some gains. The Nikkei 225 is still up 0.5%, while the Hang Seng is continuing its slide with a huge fall of over 6% from Friday’s close.

Meanwhile, Altron has recovered from the previous year’s losses and reported positive earnings.

In other news, China’s GDP beat expectations, showing 3.9% growth for the third quarter.

Here is the biggest news of the day.

• Dis-Chem expects a huge increase in earnings for its interim results. The company released a trading statement expecting earnings per share (EPS) to increase between 43% and 46% to around R0.70. The group noted that they are pleased with the strong operational performance, underpinned by continued market share growth, most notably in the pharmacy market, as well as an increase in margins across all core categories. Dis-Chem’s interim results are due on 2 November.

• Altron recovers from the previous year’s losses with positive earnings. Earnings per share (EPS) for the half-year period ended August 2022 came in at R0.24, up from a loss of R0.10 per share the previous year. Revenue showed good growth, increasing by 15% to R5.3 billion. Operating profit before capital items also showed good growth, up 57% to R255 million. The company declared an interim dividend of R0.16 per share. Altron’s Own Platforms segment recorded revenue of R1.63 billion, up 16% from last year. The biggest revenue contributor of the segment, Netstar, grew revenue by 8.7% to R909 million, but higher costs negatively impacted profitability due to load-shedding. The Digital Transformation segment’s revenue is up 25.7% to R1.37 billion, while The Managed Services segment achieved revenue of R1.36 billion, which is 16.6% higher than last year.

• Three Huge Group directors resign. Duarte da Silva, Craig Lyons, and Brian Armstrong have resigned with immediate effect following a boardroom battle where the parties could not reach an agreement. Da Silva, Lyons, and Armstrong were replaced by Veran Kathan as chairman, Michael Beamish as a non-executive director, and Zak van de Merwe as executive director.

• China GDP growth beats expectations, showing 3.9% year-on-year growth for the third quarter.