Dis-Chem loses R7 billion in market cap after Saltzman family exits leadership

Dis-Chem Pharmacies has experienced a massive R7 billion wipeout in market value following the departure of its founding family from the board. The retail giant's market capitalisation tumbled to R25.8 billion as investors reacted to the latest financial results and a total leadership shift.

The share price took a significant hit, falling from R38.19 to R30.00. This downward trend coincided with the final exit of founder Ivan Saltzman, who officially left his non-executive director role in July 2024 after stepping down as CEO last year.

The End of the Saltzman Era

The family’s withdrawal from the company has been a phased process. Lynette Saltzman resigned in 2022, while Saul Saltzman and executive director Stanley Goetsch also left their posts recently. Additionally, Dan and Mark Saltzman liquidated R320 million in shares earlier this year.

Mark Saltzman also recently drew public ire for controversial comments made against journalist Redi Tlhabi. While Dis-Chem distanced itself from his remarks, the resulting backlash and boycott calls added further pressure to the brand's public image.

Revenue Growth vs. Profit Strain

On the operational front, Dis-Chem reported a 9.3% increase in revenue, reaching R42.8 billion. The group also expanded its physical footprint to include 316 pharmacies and 42 baby stores across the country.

However, these gains were overshadowed by a 17.1% drop in basic earnings per share. Shareholders felt the pinch directly as the final dividend was slashed by 42.8%, bringing the total annual payout down to 45.34 cents per share.

Investing in the Future

Management attributed some of the financial strain to rising costs and strategic investments. The company poured R330 million into Bigly Labs, a new innovation hub responsible for the Better Rewards loyalty scheme and fresh store concepts.

Retail expenses climbed by 15.7%, partly due to new openings and a 10.3% rise in employment costs. Despite the current turbulence, the company noted that underlying profit before tax grew by 20.1% when one-off investment costs were excluded.