📊 Dis-Chem was founded in 1978 when Ivan and Lynette Strydom led with the concept of creating a discount pharmacy with products not offered in pharmacies in South Africa before. From their first retail store in Mondeor, Johannesburg, Dis-Chem has grown to become a 2019 leader in retail beauty, health food, sport supplements, and health and well-being.
📊 Thanks to its linked dispensaries, family clinics, and comprehensive self-medication centres, Dis-Chem is also a leader in pharmacies in South Africa, with its competitive advantage lying in its price structure and benefits programme. The company differentiates itself as a pharmacy group with its “Pharmacy First” approach that allows for every Dis-Chem store to have a pharmacist on site. The company also provides the widest range of retail offerings, further adding to its competitive advantage. Dis-Chem’s wholesale business, CJ Distribution, adds a further revenue stream with its third-party deliveries.
📊 In addition to this, the company’s retail pharmacies sell a wide range of beauty products as well as groceries and other household products, with over 101 stores in South Africa and 4 partner stores in Namibia, all of which have led to Dis-Chem being rated as South Africa’s top pharmacy and health and wellness brand by PMR
- Dis-Chem aims to bolster its market presence by increasing its store footprint, driving secondary retail opportunities through innovation, leveraging its head office cost base, and expanding its CJ wholesale distribution.
- The company opened eight new stores towards the end of 2017, while also identifying more than 100 opportunities for new stores from market research, significantly boosting its share price on the Johannesburg Stock Exchange (JSE), where it currently trades with a market cap of over R21 billion under the stock symbol -DCP, and driving up its share value on the live online stock chart.
- Dis-Chem will continue to maintain its market advantage by staying responsive to consumer trends, and continuing its drive towards brand consolidation by doubling its store footprint. Financial data as well as forecast analysis predict that the company will enjoy a growing market share with the maturation of its existing stores as well as its plan to continue expanding its store portfolio.
- This, coupled with the thriving health and beauty markets, means that Dis-Chem is expected to gain strong retail and store growth going forward, which in turn would result in a strong share price and healthy dividend yields for institutional investors and buyers who choose to purchase shares on the JSE.
DIS-CHEM INVESTOR TIPS
- Importantly, Dis-Chem‘s JSE listing is not available to the public, but rather the company is placing shares with selected institutional investors in South Africa, organizations which invest on behalf of their members and which trade in large share quantities. Added to this, it is also placing shares with qualified institutional buyers in the US and other specific territories.
- As a result, retail investors are only able to buy Dis-Chem shares on the morning of listing on the JSE, while high demand will result in the share price trading at a premium to the offer price at which institutions will have subscribed.
- All in all, Dis-Chem’s reported retail turnover of 14.3% to R6.7 billion with a market cap of over R21 billion means that Dis-Chem shares should prove to be a credible investment for those institutions who choose to buy in today.