Dis-Chem Pharmacies

Dis-Chem Pharmacies Ltd Formerly known as Dis-Chem Pharmacies. Dis-Chem Pharmacies Limited, formerly Dis-Chem Pharmacies Proprietary Limited, is a pharmacy company in South Africa. In addition to pharmaceutical products and services, its retail pharmacies also sell personal care and beauty, healthcare and nutrition and baby care products, as well as confectionary, dry grocery, household and other ancillary products. It offers dispensary products, including diagnostics, first aid, and mobility and incontinence; beauty products, including beauty accessories, color cosmetics, face care, fragrance and skin care; toiletries products, including bath care, body care, foot care, hair care, oral care and shaving; electrical products, including heating and cooling, household and lifestyle, and household products, including cleaners and fresheners, insecticides, kitchen tools, purifiers and veterinary. It also offers vitamin products, sports supplements, and sports equipment and aids, and foods and specialized diet. It has over 101 stores in South Africa.
  • Ticker19T8
  • ISINZAE000227831
  • ExchangeJohannesburg Stock Exchange
  • SectorFood & Drug Retailers
  • CountrySouth Africa

DIS-CHEM PHARMA sees an upgrade to Positive due to a better fundamental star rating

The general evaluation of DIS-CHEM PHARMA (ZA), a company active in the Drug Retailers industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date August 11, 2020, the closing price was ZAR 17.98 and its potential was estimated at ZAR 21.08.

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Inflection point

Direct and indirect costs from two consecutive strikes over the last two years will leave DCP's FY '20 earnings on FY '17 earnings despite the Group growing revenue by c.13% pa. Adjusting for the once-off impacts, we estimate the Group would have grown earnings in line with revenue. This is despite low inflation and the additional costs from aggressive store expansion constraining margins. In our view, the Group's earnings trajectory is normalising. DCP's store expansion is moderating and maturing trading densities will contribute to a four-year revenue CAGR of c.14%. According to our est...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Adjusting for anomalies

Dis-Chem (DCP) were recently hosts to sell-side analysts on a site visit to its three stores in the Greenstone node in Gauteng, to explain its store co-location strategies. Management also gave detail on sizable once-off items and rebate timing issues from the last 12 months, which will unwind in FY '20 and optically skew the company's underlying earnings growth trajectory. DCP's store rollout strategy over the last two years identifies greenfield locations and regions with existing mature stores (co-location). The co-location roll-out strategy is also a pre-emptive offense against peers al...

1 director sold

A director at Dis-Chem Pharmacies Limited sold 1,000,000 shares at 22.425ZAR and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. T...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Proxy voting recommendation *updated

We published a DCP proxy voting and governance report on 22 July 2019 but became aware of further information regarding related parties. This has led to the following changes: > We reduce DCP's corporate governance score to 2.71 out of 5 and rate them 'adequate' (previously 3.27 out of 5 and a 'good' rating). > We increase DCP's ESG score to 2.6 out of 5, the corresponding Beta adjustment is now 5.6% (previously 2.4 out of 5 and a 4.1% Beta adjustment). > We include a table of related parties, DCP's relation to them and further commentary in the report. Furthermore, we adapt our recommendat...

1 director sold

A director at Dis-Chem Pharmacies Limited sold 1,000,000 shares at 22.425ZAR and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. T...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Inflection point

Direct and indirect costs from two consecutive strikes over the last two years will leave DCP's FY '20 earnings on FY '17 earnings despite the Group growing revenue by c.13% pa. Adjusting for the once-off impacts, we estimate the Group would have grown earnings in line with revenue. This is despite low inflation and the additional costs from aggressive store expansion constraining margins. In our view, the Group's earnings trajectory is normalising. DCP's store expansion is moderating and maturing trading densities will contribute to a four-year revenue CAGR of c.14%. According to our est...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Adjusting for anomalies

Dis-Chem (DCP) were recently hosts to sell-side analysts on a site visit to its three stores in the Greenstone node in Gauteng, to explain its store co-location strategies. Management also gave detail on sizable once-off items and rebate timing issues from the last 12 months, which will unwind in FY '20 and optically skew the company's underlying earnings growth trajectory. DCP's store rollout strategy over the last two years identifies greenfield locations and regions with existing mature stores (co-location). The co-location roll-out strategy is also a pre-emptive offense against peers al...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Proxy voting recommendation *updated

We published a DCP proxy voting and governance report on 22 July 2019 but became aware of further information regarding related parties. This has led to the following changes: > We reduce DCP's corporate governance score to 2.71 out of 5 and rate them 'adequate' (previously 3.27 out of 5 and a 'good' rating). > We increase DCP's ESG score to 2.6 out of 5, the corresponding Beta adjustment is now 5.6% (previously 2.4 out of 5 and a 4.1% Beta adjustment). > We include a table of related parties, DCP's relation to them and further commentary in the report. Furthermore, we adapt our recommendat...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Proxy voting recommendation

Dis-chem (DCP) receives a corporate governance score of 3.27 out of 5 (FY '18: n/a) and is rated as ‘good'. By comparison, industry peer Clicks (CLS) has a corporate governance score of 3.38 out of 5. We do not recommend voting against any of the ordinary or special resolutions. However, we highlight the following risks: • A key growth vector for DCP is the group's aggressive store rollout to consolidate the independent pharmacy space in SA. The loss of key persons may compromise the strategic direction of DCP given that the CEO, I Saltzman, is post retirement age (68). However, DCP d...

Jiten Bechoo ...
  • Pratish Soni

Dis-Chem Pharmacies | Watch this space

Dis-chem (DCP) aggressive store rollout (8% new space in FY'19) dilutes trading densities short-term but increases the longer-term opportunity set and in turn the value of the group. While CLS has a more established business model, DCP's valuation discount (c.20%) and investment in its footprint, provides investors with an attractive opportunity in the medium-term. Key to both counters, is that they are well placed to gain market share from independents and grocery chains in the drug and personal care market segments through convenience and lower selling prices. Both CLS and DCP currentl...

DIS-CHEM PHARMA sees an upgrade to Positive due to a better fundamental star rating

The general evaluation of DIS-CHEM PHARMA (ZA), a company active in the Drug Retailers industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date August 11, 2020, the closing price was ZAR 17.98 and its potential was estimated at ZAR 21.08.

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