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October 6, 2009 By Florence de Vries PharmaceuticaL retailer Dis-Chem will consider listing on the JSE, according to director Saul Saltzman, although analysts predict it will not happen within the next year. Established in Mondeor, Johannesburg in 1978, the Dis-Chem group is still owned by the original founders.

“Rumours that we are listing soon are just that, but we are not ruling out this possibility in future,” Saltzman said last week. Retail analysts believe this move would elbow in on the territory of listed rival Clicks and claim that Dis-Chem may even get a better rating than its contender. According to Christopher Gilmour, a retail analyst from Absa Asset Management, Dis-Chem is far more focused than the Clicks group, since it does not have “distractions like Musica” and its stores generally have a wider range than the Clicks group. “But Clicks excels on the wholesale pharmaceutical side,” he added. Retail chains are steadily moving in on the pharmaceutical market with the Clicks group dispensing medicine at nearly 200 pharmacies in its stores countrywide. Excluding its recently established franchise stores, Dis-Chem has just under 40 outlets nationally but said it planned to expand because having a national presence would allow the company more exposure to medical aid claims. Retailer Pick n Pay, which operates 17 pharmacies, plans to introduce 40 more soon, while Woolworths and Netcare are operating a third trial pharmacy in Eastgate. The Shoprite group has 72 Medi-Rite pharmacies nationwide, of which 15 are in Shoprite stores.

Dis-Chem’s most recent move was the roll-out of its first three franchised stores – in Nelspruit, Port Elizabeth and East London. These would be the first of 11 across the country, Saltzman said.

Explaining the move, he said: “We did extensive research on feasibility for these site locations after which we undertook the challenge of finding the correct franchise partner to work with.”

Other sites for Dis-Chem’s franchise stores include KwaZulu-Natal’s South Coast, Pietermaritzburg and Welkom.

“We are looking to expand beyond South African borders into Africa,” he added. Expansion into Namibia and Botswana was the next likely step.

Retail analyst Syd Vianello of Nedcor Securities believed the franchise model would give Dis-Chem huge momentum but he ruled out the possibility of a listing right away. “If they were thinking of listing, the depths of a recession is certainly not the time,” he said.

Gilmour added that a lot of investors would like to see Dis-Chem listed. He believed that at some point the founders “will cash in their chips and take it to the market”.