Dis-Chem co-founder and outgoing CEO Ivan Saltzman will sell 7.5% of his shares in the retail pharmacy that are held in an investment company to selected investors, with a further percentage to be sold to senior management including his successor Rui Morais.
Dis-Chem announced on Tuesday that Morais, the company’s CFO who has been its public face in recent years, will replace Saltzman as CEO after getting the nod from the nomination committee. The takeover date has not been given.
The retail pharmacy was founded in 1978 by Ivan and his wife Lynette Saltzman, both newly qualified pharmacists, who opened their first store in Mondeor, south of Johannesburg.
Dis-Chem announced that Ivlyn Local Investment Holdings, which holds Saltzman’s shares, will sell 7.5% to specific shareholders if it achieves “acceptable pricing”. Saltzman wants to sell a further 3.75% to senior managers as part of a management retention scheme. The executives, including Morais, will be unable to sell their shares for the next ten years.
Share ownership is used as an incentive to ensure senior executives make decisions that are good for shareholders and the share price.
Ivlyn now holds 52.67% of Dis-Chem shares, and if these sales are completed its shareholding will drop to 41.5%. Dis-Chem announced that Saltzman plans to sell 10% more in a BEE transaction, which, if approved by the end of August, will reduce his shareholding to 31.4%.
The group, which has more than 170 stores in SA, said in a trading statement for the 22 weeks from March 1 to August 6 that revenue growth, including its wholesale pharmacy arm, reached R13bn, an increase of 16.3% compared with the corresponding period in 2020.
Retail revenue from stores increased 16.0% to R11.5bn, with comparable sales growth in the same stores up 6.7%. However, sales of lower margin goods grew, while sales with higher profit margins were down.
Cosmetics, fragrances and jewellery, which have higher profit margins, have sold at low volumes since the pandemic began in 2020, while vitamins and over-the-counter medicines, which bring in lower profits, sold much better.
Dis-Chem said by the end of October the Baby City retailer it bought in 2020 will have clinics in all stores. These facilities will offer antenatal care and infant vaccination.
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