I am very pleased with Dis-Chem’s performance for the year ended 28 February 2019. We have reported positive results with improved market share across all our core categories.

Ivan Leon Saltzman

Overview

We celebrated Dis-Chem’s 40th anniversary in the last financial year. When Lynette and I opened our first pharmacy in the south of Johannesburg in 1978, we could never have imagined that DisChem would grow to the size that it has become, enabling direct employment for more than 18000 people and serving customers in 150 stores
across southern Africa

40 years later, our ethos of caring is as strong as ever, which is evident in our passion for customer satisfaction, earning us numerous awards over the years. Equally pleasing, is that our growth and success over the years has allowed us to contribute beyond our shareholder, employee and customer base, to members of disadvantaged communities who benefit from the work of the DisChem Foundation that was established in 2006, including the Food Garden that helps to feed thousands of people.

Our collective achievements, hard work and commitment have made Dis-Chem one of South Africa’s most  loved brands, as our 4.8m loyalty members will attest.

South Africa’s successful national election has culminated in the formation of a more streamlined cabinet which, maybe hopefully, aims to introduce policies that will enhance job creation and provide more clarity on investment and business policy. This is imperative for all of us to proceed with our respective growth and development activities with far greater confidence and to position Dis-Chem for the next upswing in the economy

Group performance

I am very pleased with DisChem’s performance for the year ended 28 February 2019. We have reported positive results with improved market share across all our core categories, despite the ongoing economic pressure that our customers are continuing to experience.

Dis-Chem’s market share gains, which are the largest we have seen in the last three years, were driven by our everyday low-price strategy and deep cut promotions, our trusted instore service, the availability of choice and our continued focus on exclusive brands and private labels. All of these factors make us a preferred destination for cost-conscious consumers searching for value offerings.

We experienced a strike during the year, which lasted five months and which had a marked impact on the Group’s performance. I must commend our management team and all employees for their efforts during the strike. All stores operated with minimal disruption and customers continued to receive our renowned service and quality. Management’s focus remains on developing a productive relationship with our employees, improving wholesale productivity levels and cost efficiency as well as optimising the levels of stock holdings, which the strike necessitated.
We have achieved our store roll-out plan of adding 20 stores or more annually, and this remains on track for future years.
Earnings attributable to shareholders and headline earnings both grew by 7.4%, while earnings per share and
headline earnings per share increased 7.4% to 85.4 cents. Group turnover grew by 10% to R21.4 billion, with a 9.7% increase in our retail turnover to R19.6 billion and a 11.2% increase in our wholesale turnover to R14.5 billion.

Cost efficiency is a major focus for us and having wholesale operations that are more geographically aligned with our core retail store base, as well as the independent pharmacy market we serve, should lead to additional cost containment in the next financial period.