Dis-Chem pharmacy in Canal Walk. Picture Henk Kruger/Cape Argus Dis-Chem pharmacy in Canal Walk. Picture Henk Kruger/Cape Argus
Johannesburg - One of SA’s largest pharmacy chains, family-owned Dis-Chem, has announced its intention to list on the JSE’s main board to boost its growth plans.
Dis-Chem, 66.9 percent owned by the Saltzman Family Trust, turned over R15.5 billion in the year to February, with earnings before interest, tax, depreciation and amortisation of R1.1 billion. It did not provide a net figure in its announcement, or an anticipated share price or listing date.
Its other shareholders include key management, with 23.4 percent, while the balance is held by an unnamed financial investor.
Cash raised by the listing will be used to buy back shares from existing shareholders, pay down debt and general corporate purposes.
In a statement issued on Monday, the pharmaceutical group - known for being aggressively competitive, says it will convert into a Limited company from a Proprietary Limited one upon listing.
The company, founded in 1978, anticipates being listed in the Food and Drug Retailers sector of the JSE. Its plans to list have been in the pipeline for some time.
Read also: Dis-Chem plans share sale
CEO and co-founder Ivan Saltzman says listing is “an important next phase of Dis-Chem’s growth story”.
Dis-Chem’s growth plans include doubling its store footprint in the next 5 to 8 years by pursuing store roll-out opportunities and converting independent pharmacies to the Dis-Chem brand.
Dis-Chem has more than doubled its store base since 2010 and tripled since 2008. It currently has 101 stores in South Africa and two partner stores in Namibia.
It agreed lease terms for 29 new stores after the end of its February, of which 3 stores were opened in the first half, with another 8 to be opened before the end of next February, and 18 to be opened in the year to February 2018.
Dis-Chem also aims to continue growing its brand through secondary retail opportunities, boost its operating margin by leveraging its investment in its supply chain infrastructure and expand CJ Distribution in the medium-term.
CJ Distribution, which it wholly owns, distributes medicine to its own stores and well as third-parties. Dis-Chem aims to “capture the supply chain of independent pharmacies and to gain scale, and to expand into the distribution business”.
Saltzman explains “a listing will support our growth and allow us to better service our customers and other stakeholders. It also facilitates a partial exit whilst allowing existing shareholders and key management to remain materially invested ensuring strong alignment between management, existing and new shareholders.”
Saltzman will continue in his role as CEO, while his wife - Lynette - will remain its MD, he says.
A prospectus will be made available in due course.
IOL
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