Dis-Chem Climbs Most in Six Months as Pharmacy Chain Takes Share

CAIRO (Capital Markets in Africa) – Dis-Chem Pharmacies Ltd. rose the most since January after South Africa’s second-biggest pharmacy chain gained market share as sales growth outstripped several local retailers.

Retailers in Africa’s most-industrialized economy have struggled as higher taxes and fuel prices curb consumer spending.

Dis-Chem’s sales for the four months through June rose 11 percent to 7 billion rand ($520 million), the Johannesburg-based company said in a statement on Thursday. That compares with Shoprite Holdings Ltd., Africa’s biggest supermarket chain, which this week said annual revenue in its South African stores rose 5.7 percent, while Woolworths Holdings Ltd. said annual sales increased 1.6 percent.

“Dis-Chem’s sales look better than the other retailers’ recent numbers and the commentary overall is positive, with them taking market share,” said Michele Santangelo, director for equity research at Independent Securities in Johannesburg. “It’s a reasonable performance in a tough local environment.”

The stock rose as much as 7.4 percent in Johannesburg, the biggest intraday gain in six months and traded 6.4 percent higher as of 2:08 p.m. in Johannesburg. That pares Dis-Chem’s decline this year to 25 percent and values the company at 23.7 billion rand.

Dis-Chem also gave analysts a tour of its distribution centre on Thursday. Market leader Clicks Group Ltd. hasn’t released a trading update for the corresponding months.

Source: Bloomberg Business News