Chairman’s report

David Nurek

Independent non-executive

Over the past year a myriad of global and domestic economic factors have conspired to create significant inflationary pressures for South Africans which has eroded consumer disposable income and confidence.

While the Clicks Group is not immune to the country’s prevailing economic headwinds, our business model is resilient and the core healthcare markets in which we operate are highly defensive and non-cyclical. The business has also proven its ability to adapt to changing market dynamics time and time again.

UPD was challenged by a major systems implementation which impacted performance in the first half of the year. Decisive action was taken by management and UPD reported an improved performance in the second half, and the board is confident of the business making a recovery in the new financial year. Clicks compensated for the slower UPD performance and delivered outstanding results in the adverse retail trading conditions.

Group turnover increased by 8.2% to R41.6 billion (excluding vaccinations), with retail turnover growing by 12.2%. Diluted headline earnings per share (HEPS), adjusting for the insurance recoveries last year, increased by 11.5% and the dividend was increased by 6.6% to 679 cents per share. The group generated cash inflows from operations of R5.9 billion, an increase of R1.6 billion over last year, and returned R2.3 billion to shareholders in dividend payments and share buybacks.

The performance of the past year maintains the group’s consistent growth trajectory of the past decade or more. Since 2014 the group has generated a compound annual total shareholder return of 19.8% per annum. Diluted HEPS has grown by a 10-year compound rate of 13.4% and the dividend per share by 15.0% per annum.

Over the past five years since 2018, which includes the period impacted by Covid-19, the destructive civil unrest in KwaZulu-Natal, unprecedented load shedding and one of the most severe consumer downturns in many years, the group grew diluted HEPS at a compound rate of 12.7% per annum, again confirming the resilience of the business.

The strong balance sheet and robust cash flows enable the group to reinvest for growth, with capital expenditure of R6.0 billion over the past 10 years. More than R12 billion has been returned to shareholders in dividends and share buy-backs, underpinning the quality and premium rating of the Clicks Group share.

More than


returned to shareholders over the past 10 years

Board succession and tenure

We acknowledge the benefits of an experienced and knowledgeable board but also recognise the oversight advantages and benefits that stem from fresh insights and debate in the boardroom.

During the year we continued to progress our structured succession plan aimed at refreshing the composition of the board. Long-standing directors Prof Fatima Abrahams and Martin Rosen retired at the annual general meeting (AGM) in January 2023 while John Bester will be retiring at the forthcoming AGM in February 2024.

We welcomed Christine Ramon as an independent non-executive director in February 2023. Christine’s wide-ranging financial, strategic and leadership experience in large listed companies, together with her governance experience, make her an asset for any board. Richard Inskip was appointed to the board in July 2023 and brings a wealth of retail expertise which included holding senior executive positions in two large listed retailers. He has current and highly relevant experience in specialist areas of retail across technology, e-commerce, data management, supply chain and strategy.

Christine and Richard are already making a positive and substantial contribution to our board deliberations.

Following the February 2024 AGM, six of our seven non-executive directors will have served on the board for four years or less.

The board refresh will be completed when my current term of office comes to an end at the AGM in 2025 and I will retire as a director and chairman of the company. The board has initiated a process to identify a successor and we are confident of appointing a candidate from within the ranks of the current board.

It is important for shareholders to note that the board refresh does not signal a shift in the strategic direction of the group.

Black board members


 Target 50%

Female board members


Target 33%

Board developments

Following the early retirement of Michael Fleming in December 2022, Gordon Traill was appointed as chief financial officer (CFO) and an executive director with effect from 1 January 2023.

The benefit of appointing an internal candidate of Gordon’s calibre and 17 years’ wide-ranging experience within the group has been evident in the immediate impact he has made on the group’s financial and capital management portfolio, while he has been instrumental in completing and integrating the group’s recent acquisitions.

The retirement of Prof Fatima Abrahams as a director resulted in changes to our board committees, with Nomgando Matyumza being appointed as chair of the social and ethics committee and Sango Ntsaluba as chair of the remuneration committee.

The remuneration and nominations committee has been restructured and will in future function as a separate remuneration committee, with the functions of the nominations committee being assumed by the board. In order to enhance the oversight of the group’s risk function, an additional meeting of the audit and risk committee will be convened each year to focus exclusively on risk management.

Our board is diverse in its composition and thinking, and this diversity ensures that the board considers the needs and concerns of all our stakeholders and interest groups. Currently 60% of our directors are black and 40% female, exceeding our voluntary targets of 50% black and 33% female representation on the board.

Governance and oversight

Governance, compliance and oversight practices are continually enhanced, supporting our belief that robust governance can benefit long-term equity performance and enhance shareholder value.

Following extensive and positive engagement with shareholders, the group’s long-term incentive (LTI) scheme for executives has been amended to align our remuneration practices more closely with global best practice. Return on invested capital has been adopted as a performance measure to replace total shareholder return to further strengthen executive alignment to shareholder value creation while the vesting period for long-term incentives has been extended from three to five years. Our remuneration policy has been further enhanced with the introduction of a minimum shareholding requirement for the members of the group’s executive committee. Refer to the remuneration report on the group’s website for further details.

We have appointed KPMG Inc. as the group’s new external auditor for the 2024 financial year, subject to shareholder approval at the AGM in February 2024. Ernst & Young Inc. (EY) have served as the group’s auditor for 11 years and on behalf of the board we thank the partners and staff for their service and support over this time.

Environmental, social and governance (ESG) practices have continued to be integrated and entrenched across the business. The group’s progress is reflected in our performance relative to global standards, achieving a ‘AA’ ESG rating from MSCI and being included in the FTSE4Good Index for the seventh successive year.

As part of the independent evaluation for inclusion in this index, the group again achieved the maximum score for the governance element, confirming that our governance is in line with international standards. The group achieved an overall ESG score of 4 out of 5, far outperforming the drug retailers’ sector average score of 2.4.


The performance of the past year reflects the quality of the leadership, management and staff in the Clicks Group. Thank you to our CEO Bertina Engelbrecht, CFO Gordon Traill and the executive teams in Clicks and UPD for their inspirational leadership in navigating the group through this turbulent trading environment.

Thank you to our 18 400 employees at head office, stores and distribution centres across the country for a job well done.

My fellow non-executive directors provide invaluable support in governing the group’s affairs and I thank them for their continued commitment, counsel and guidance. On behalf of the board, I extend my gratitude to our retiring directors for their outstanding contributions to the board and committees over several years, and we wish them well into the future.


David Nurek
Independent non-executive chairman

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