Dis-Chem doubled its spending on X, bigly labs, its in-house technology unit, in the six months to August, as earnings fell again. TechCentral reported the pharmacy group’s interim results, which came out after markets closed on Thursday.
Headline earnings per share dropped 12.8% to 64.3c, Dis-Chem said. Revenue rose 8% to R23-billion, but expenses climbed 13.1%. Operating profit fell 10.5% to R1-billion, and the interim dividend was cut 12.9% to 25.62c.
The group blamed the higher costs on new stores and X, bigly labs. The unit “doubled the cost investment over the corresponding period”, Dis-Chem said. It did not give the amount in rand.
Dis-Chem shares were down nearly 11% in Johannesburg at 10.38am on Friday, TechCentral reported. That took them to levels last seen three years ago.
A year ago, Dis-Chem said it had spent R130-million on its healthcare ecosystem in the six months to August 2025. About R78-million of that went to X, bigly labs. Setting up the unit cost R330-million in the year to February 2026.
“In FY2027, we expect to begin demonstrating measurable returns from these investments as Better Rewards matures, the new app launches and X, bigly labs’ capabilities are progressively commercialised,” CEO Rui Morais wrote in the annual report. FY2027 is the year to February 2027.
Dis-Chem said it expected earnings to be spread more evenly across the two halves of FY2027. It said this would add to “a stronger full-year earnings performance”. The group also said the unit’s extra costs would slow over time.
Since the unit launched, Dis-Chem has put R240-million into rebuilding its digital systems. The group said the money went into its core commerce platform, as well as pricing, fulfilment and order management. “The business now runs on a modern, scalable foundation,” it said.
Few customers have seen the changes so far. The first release of the new app has gone to 22 000 customers. A second release is planned for the last quarter of FY2027, which runs from December to February.
That date has moved. A year ago, Dis-Chem promised a new app by around August this year, TechCentral reported. In September, Yusuf Kaka of X, bigly labs told TechCentral the target was a public release by early 2027.
Spending to grow the business rose 71% to R492-million in the half. It covered new stores, the digital rebuild and IT upgrades. In July, Dis-Chem also bought the remaining 50% of Health Window for R125-million.
TechCentral described Better Rewards, the loyalty programme relaunched in October 2025, as the clearest return so far. Active membership grew 27% to 8.2 million, and members now make up 86.1% of sales. The programme gave back R1.5-billion in discounts in its first year.
Front-shop volumes, which exclude pharmacy, grew 5.5% in the year to 27 September, according to NielsenIQ data cited by the group. The rest of the market grew 0.1%.
Margins still slipped. The retail operating margin fell from 4.6% to 4.1%, and retail operating profit fell 4% to R794-million. In the seven weeks to 19 October, group revenue grew 7.9%.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.