Clicks reports 26% rise in half-year profits

Plans to invest over R800 million into the business for the current financial year.
The group's strong half-year performance has been supported by the national Covid-19 vaccination rollout and a growing customer base. Image: Supplied.

JSE-listed pharmacy and healthcare retail giant Clicks Group reported a 26% surge in diluted headline earnings per share (Heps) for the six months ended February 28 2022 on Thursday.

The strong half-year performance came despite challenges facing the retail sector, such as the after effects of the July riots in KwaZulu-Natal and parts of Gauteng. The group says it has been supported by the country’s ongoing vaccination programme, while its expanding customer base also contributed to the robust performance.

Read: Checkers joins battle for baby market share against Dis-Chem and Clicks

The group’s Heps, a key profit measure in corporate South Africa, came in at 466.9 cents for the interim period, which was up from 370.6 cents reported in the previous comparable period.

This saw Clicks upping its interim dividend by 26.3%, to 180 cents per share.

The company reported notable increases in other key metrics, with group turnover up 9% to R19.6 billion for the interim period, while retail sales showed a double-digit increase of 13.6%.

United Pharmaceutical Distributors (UPD) – a division of the Clicks Group – also reported positive numbers with its managed turnover – combining wholesale and bulk distribution – increasing by 6.7% to R14.2 billion in the half year.

“The group returned R1.3 billion to shareholders in dividend payments [R848 million] and share buy-backs [R446 million]. At period-end the group held cash resources of R838 million,” it notes in an interim results statement.

Clicks CEO Bertina Engelbrecht says the group “once again delivered a resilient performance” for its half-year, adding that this highlights “the continued defensiveness of the group’s business model in the ongoing tough trading environment”.

Capital investments

Despite the tough operating environment over the last few years – given the context of the Covid-19 pandemic, the July riots last year and the fatal KwaZulu-Natal floods just a few weeks ago – the group has committed to ploughing R876 million for the full financial year to grow the business.

Clicks says the bulk of this investment, R565 million, will be spent on its stores while the remaining R311 million will be directed towards technology and supply chain infrastructure.

“Growth in Clicks will continue to be supported by the national vaccination programme and the opening of a further 28 stores for the year.”

Bertina Engelbrecht, Click Group

Clicks CEO Bertina Engelbrecht. Image: Clicks website

“The normalisation of activity and the opening up of the economy in a post-Covid environment will be positive for UPD’s major customers, Clicks and the private hospital groups, which is expected to benefit UPD’s wholesale turnover,” says Engelbrecht.

Read:
Clicks continues expansion, plans to open 11 baby ‘showroom’ stores
Clicks CEO Vikesh Ramsunder resigns to take up top job in Australia

According to the group, Click has managed to increase its ClubCard active membership to 9.5 million and its mobile app has been downloaded by 2.7 million customers.

Clicks further reported that its active ClubCard membership has in the current reporting period, accounted for 80.5% of sales.

The group has expanded its footprint, opening its 800th Clicks store in March, and intends to open 28 more stores this year.

It has opened 45 new pharmacies during the period bringing its pharmacy store count to 646.

“The convenience and accessibility of the pharmacy network is highlighted by the fact that 50% of the country’s population now live within 5.5 kilometres of a Clicks pharmacy,” the group points out.

Clicks Share Price

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