November 7, 2019 / 7:00 AM / a month ago

South African drugstore Dis-Chem half-year profits fall

JOHANNESBURG, Nov 7 (Reuters) - South African drugstore chain Dis-Chem Pharmacies Ltd reported a 39% drop in interim profit on Thursday, hurt by strike-related costs and lower demand from suppliers.

Dis-Chem, which competes with Clicks Group, said headline earnings per share (HEPS) fell to 31 South African cents per share in the six months ended Aug. 31, from 50.7 cents per share, which was the restated figure a year ago.

HEPS is the main profit measure for companies in South Africa that strips out certain one off items.

The company had been hit by a prolonged strike from November last year to March over workers’ wage demands, which led it to miss earnings expectations for its full fiscal year that ended in February.

“This set of half year results is the last set impacted by once off strike related items which, once eliminated, highlight our cost containment efforts together with a significant stock rationalisation,” Chief executive Ivan Saltzman said in a statement.

Revenue for the interim period also rose to 11.8 billion rand ($795.27 million) from 10.5 billion rand a year ago, boosted by positive volume growth despite a difficult trading environment.

The company declared an interim dividend of 12.8 cents during the six month period, compared with 20.7 cents during the interim period a year ago. ($1 = 14.8378 rand) (Reporting by Tanisha Heiberg; Editing by Amy Caren Daniel)

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