Dis-Chem is now valued at roughly R20.3 billion and competes with rival Clicks Pharmacies, which is valued at R62.5bn; both trading as the largest dispensaries in the country. Picture: Karen Sandison/African News Agency (ANA)
Dis-Chem Pharmacies is facing a new era as it yesterday announced that Ivan Saltzman, who co-founded Dis-Chem with his wife Lynette in 1978, would step down as CEO at the end of June, 2023.
Under the Saltzmans, the drug group has grown from a start-up in 1978 to a major health products retailer, which listed on the JSE in November, 2016.
It is now valued at roughly R20.3 billion, and competed with rival Clicks Pharmacies, which is valued at R62.5bn, trading as the largest dispensaries in the country.
In a trading update yesterday, the group said Saltzman would remain an executive director on the board and continue to serve as an active member of the executive management team.
“His role includes an emphasis on the group’s commitment to accelerate retail space growth, together with a concentrated focus on the trade of the retail store network,” the group said.
Saltzman said: “Over the course of the past 45 years, Lynette and I have grown the business from a single store to what is today – the largest retail pharmacy chain by market share in South Africa – with a network of over 300 retail stores and over 20 000 staff.
“I am confident in and supportive of the future leadership of the group who share the same commitment to the brand fundamentals that Lynette and I do.
“Together with Lynette, I look forward to doing what I enjoy, spending time in the stores, and ensuring that our staff continues to provide the value and service that has made the brand what it is today. I will continue to identify opportunities to expand our store footprint,” he said.
Taking over the reins is Rui Morais, the group’s chief financial officer (CFO). He will assume the role of CEO effective from July 1, 2023. His appointment was announced in August, 2021, as successor to Saltzman.
Meanwhile, in its trading update, Dis-Chem said for the 12 months ended February 28, 2023, it recorded revenue growth – excluding the contribution of Covid-19 vaccines and testing – of 9% compared to the corresponding financial period.
“Retail revenue excluding Covid-19 vaccines and testing is up 8.4%, while external wholesale revenue is up 20.7%,” the group said.
It is in the final stages of agreeing to acquire a 63 000m distribution centre in Gauteng, for R502 million.
“With the acquisition of this property, the group will increase its warehouse space by 75%,” it said.
Deal Leaders International chief executive corporate and advisory, Andrew Bahlmann, said retail pharmacy Dis-Chem’s recently released results demonstrated a well-thought-out succession plan for the gradual withdrawal of its co-founders, married couple Lynette and Ivan Saltzman, as well as strong community philanthropy.
“Succession planning is particularly vital in a family-owned business, but also in every business. The skills shortage in South Africa means that many sectors continue to be managed by people either approaching retirement or past it, and fearful to leave because replacements don’t exist with their many years of intimate experience in that sector.
“But there still has to be a passing of the baton… For the company to survive, leaders must have a plan based on a strong bench of employees,” he said.
FNB said in its weekly note on Friday on Dis-Chem that an early investment in generator capacity had resulted in minimal disruptions to its ability to trade through load shedding.
“Dis-Chem continues to grow revenue ahead of the market. Retail revenue growth was supported by continued normalisation in shopping patterns, with management highlighting notable strength in healthcare and nutrition – where the company maintains a leading market-share position.
“This normalisation, along with higher beauty sales will likely be margin supportive which should, in-turn, support the bottom-line. Analysts expect momentum to continue with full-year revenue growth of 7.4%, and Heps (headline earnings per share) growth of 24.2%,” FNB said.
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