The Group is pleased with a good set of results in a tough environment. We believe our investment in an integrated healthcare ecosystem will bode well for more South Africans and in turn the Group.

Ivan Leon Saltzman

The Group’s latest results are testament to the resilience of a business that has withstood challenging trading conditions and celebrated successes on an ongoing basis. The trading environment during the last financial year was challenging and complex, with normalised shopping patterns offset by the impact of rising fuel and food costs, while embattled consumers continued to experience interest rate escalations.

Against this backdrop, the Group’s total revenue increase of 7.4%, to R32.7 billion, is commendable. Our businesses performed extremely well, with operating profit increasing 13.4% to R1.7 billion, and we continued to see market share gains across healthcare, medical, baby and dispensary categories. The latter entrenched our position as South Africa’s largest retail pharmacy Group, by dispensary market share.

These consistent gains prove that Dis-Chem’s customer- centric philosophy and well-priced goods and services make the Group a shopping destination of choice for value- conscious consumers, especially during these challenging times. While there has not been a significant change in the items that are being purchased, buyers are increasingly shopping for value-based promotions. We have also seen a polarisation of spending towards end-of-month payday cycles, another sign of financial pressure.

Load shedding has had a significant impact on the economy, affecting consumers as well as businesses of all sizes. Fortunately, the Group’s early investment in generator capacity has made it possible for all our stores to remain open during electricity blackouts, although this has led to a considerable increase in operational costs, with diesel costs up by 65% to R91 million.

The last financial year and subsequent trading months have been significant for the Group, with various developments paving the way for further growth and opportunity.

Strategic initiatives

We achieved a milestone with the opening of our 300th retail store, having opened 13 new Dis-Chem stores and eight new Dis-Chem Baby City stores during the period. Our store growth continues apace – at the end of the financial year the Group had 312 stores across all nine provinces in South Africa, four in Namibia and three in Botswana.

The rapid growth of the Group has necessitated additional warehouse capacity. This will be addressed with the imminent acquisition of a 63,000m2 distribution centre, ultimately resulting in a 75% increase in warehouse space. This significant growth in available space positions us superbly well to double our current store count and grow our market share in the independent market.

Integrated healthcare offering

The Group has continued its focus on developing an integrated healthcare value chain to drive down costs, while making private healthcare accessible to more South Africans.

Dis-Chem Health, our medical insurance and gap cover offering, continues to gain traction and the launch of extra, our policyholders’ rewards programme, further supports our goal of making private, quality healthcare affordable for the estimated 12 million employed people who do not have medical aid. These consumers often buy medication at pharmacies and, in some cases, private facilities at a premium rate, and Dis-Chem is well placed to offer medicines at a lower cost, specifically using generics.

The proceeds from Dis-Chem Health are being reinvested to grow our distribution channels; we are also making further investments in pharmacies and nursing skills to ensure we can create an appropriate pool of nurses. As it is, Dis-Chem’s 486 in-store clinics are operating at high capacity, with 480 registered nurses providing daily clinical care and enabling 8,000 virtual consultations with doctors per month.

People practices

To ensure the continued positive operating and financial performance of the business, as well as the anticipated growth, Dis-Chem fully recognises the importance of our staff’s ongoing learning and development. In the past year we have placed a great deal of focus on development initiatives, with R70.5 million invested in learning and development programmes, of which 97% were dedicated to accredited or registered programmes.

The Group has also continued to focus on organisational transformation, diversity, equality, and a sense of belonging, while leveraging technology to support effective communication and engagement throughout the organisation.