HealthPlus Pharmacy Group — Risk Analysis & Mitigation
The risk register and the sensitivity analysis covering market, operational, financial, regulatory and execution risks.
Section 10 · Business Plan
Risk Analysis & Mitigation
The risk register and the sensitivity analysis covering market, operational, financial, regulatory and execution risks.
10.1 Risk Register
The following risk register identifies, assesses, and proposes
mitigation strategies for the principal risks facing the business:
| Risk Category | Risk Description | Probability | Impact | Mitigation Strategy |
|---|---|---|---|---|
| Regulatory | Pharmacy licence applications delayed or declined by SAPC/DoH | Medium | High | Early application submission; engage regulatory consultants; identify multiple candidate locations per planned store |
| Competition | Aggressive response from Clicks/Dis-Chem (pricing wars, location pre-emption) | High | High | Differentiate on digital experience and clinic services; avoid head-to-head location overlap; build loyalty programme stickiness |
| Supply Chain | Wholesaler dependency leading to stock-outs or pricing pressure | Medium | Medium | Diversify across multiple wholesalers; accelerate distribution centre timeline; build safety stock for critical medicines |
| Margin Pressure | SEP adjustments below inflation; medical scheme reimbursement rate compression | Medium | High | Accelerate private label programme; expand front-shop contribution; optimise generic substitution rates |
| Technology | E-commerce platform underperformance; cybersecurity breach | Low | High | Phased platform rollout with MVP approach; invest in cybersecurity infrastructure and data protection compliance (POPIA) |
| Macroeconomic | ZAR depreciation increasing import costs; consumer spending contraction | Medium | Medium | Source locally where possible; maintain flexible pricing models; focus on essential health categories |
| Human Capital | Pharmacist shortage; high staff turnover | High | Medium | Competitive remuneration packages; pharmacist bursary programme; strong employer brand and career development pathways |
| Execution | Store rollout delays; underperformance of early stores | Medium | High | Conservative rollout phasing; rigorous site selection criteria; performance monitoring with early intervention protocols |
10.2 Sensitivity Analysis
The following table illustrates the sensitivity of Year 5 EBITDA to
key variable changes:
| Variable | Base Case | Downside (-10%) | Upside (+10%) | EBITDA Impact |
|---|---|---|---|---|
| Revenue per Store | R20.4M | R18.4M | R22.4M | ± R18.5M |
| Gross Margin | 38.0% | 34.2% | 41.8% | ± R19.4M |
| Occupancy Cost | 8.0% of Rev | 8.8% | 7.2% | ± R4.1M |
| Staff Cost | 14.0% of Rev | 15.4% | 12.6% | ± R7.1M |
| Store Count (Year 5) | 25 | 22 | 28 | ± R11.5M |
Downside Scenario: Even in a stress scenario where revenue per
store is 15% below base case, gross margins compress by 200 basis
points, and store rollout is delayed by 6 months, the business remains
EBITDA-positive from Year 2 and achieves net profitability by Year 5,
demonstrating the resilience of the underlying business model.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of HealthPlus Pharmacy Group (Pty) Ltd.