Cape Town – Clicks Group proved its resilience and defensiveness in challenging trading conditions as retail turnover increased by 11.9% in the six months to February 2023, with Clicks reporting market share gains in all product categories.
Group turnover increased by 6.8%, excluding vaccinations, to R20.0 billion for the half year. Diluted headline earnings per share, adjusting for the financial impact of the KwaZulu-Natal civil unrest and related insurance payments, increased by 10.2%.
The group returned R1.1 billion to shareholders in dividend payments and at the end of February 2023 held cash resources of R1.2 billion.
Chief executive Bertina Engelbrecht said Clicks delivered strong turnover and profit growth despite mounting pressures on consumer disposable income and increased load shedding.
“Growth in Clicks was driven by the sustained post-Covid recovery in the beauty and personal care categories, supported by the Clicks ClubCard loyalty programme which passed the 10 million active member milestone,” she said.
Private label sales grew by 15.1%, with one in every four products sold now being a Clicks-branded product.
Clicks expanded its retail footprint to 861 stores with the opening of a net 21 new stores in the first half of the year. Clicks plans to open 50 new stores and 40 pharmacies for the full financial year, with the longer-term target of operating 1 200 stores.
A further 18 pharmacies were opened, extending the national pharmacy presence to 691. Currently 50% of the country’s population live within 5.2 kilometres of a Clicks pharmacy, highlighting the convenience of the pharmacy chain. After the end of the reporting period the group acquired M-Kem, a long-established 24-hour pharmacy in the Western Cape. This will be Clicks’ first 24-hour pharmacy.
The acquisition of the Sorbet franchise beauty salon chain, which was announced in November 2022, is awaiting competition authority approval.
UPD’s total managed turnover, combining wholesale and bulk distribution, increased by 7.8%. Performance was impacted by the lower increase in the regulated single exit price (SEP) of medicines granted by the Department of Health and operational challenges during the systems transition at three of its distribution centres.
On the outlook for the second half of the financial year, Engelbrecht said the group expects trading conditions to remain extremely constrained. “High levels of inflation are placing pressure on consumer disposable income while load shedding will continue to disrupt trading patterns.”
Clicks Group plans record capital investment of R958 million for the full financial year, split between new stores and pharmacies and supply chain, technology and infrastructure.
Issued by Tier 1 Investor Relations on behalf of Clicks Group
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