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SA ‘has not experienced a winter cold and flu season’ – Clicks

But, group delivers strong overall trading since the Covid-19 lockdown.
Despite pharmacy sales taking a hit, Clicks expects double-digit growth in headline earnings for its year to the end of August 2020. Image: Supplied

Retail healthcare giant Clicks on Wednesday noted in a voluntary trading update that pharmacy sales in South Africa “have been negatively impacted as the country has not experienced a traditional winter cold and flu season”.

The group did not mention the extent of the impact, however, it highlighted that colds and flu are generally strong drivers of sales growth for the company.

“The incidence of colds and flu has been limited as South Africans are wearing face masks during the pandemic, social interaction has been limited, schooling restricted and large numbers of people are working from home,” it pointed out.

Despite the knock to pharmacy sales, Clicks reported that total retail sales grew by 6.3% for the 23-week period from March 1 to August 9 this year. The relatively strong performance in the face of Covid-19, saw its share price rise more than 5% (to around R241) in midday trade on Wednesday.

Clicks intraday share price vs JSE All Share

Clicks said that group turnover increased by 10% to R32.3 billion in the 49 weeks to August 9 2020.

“Clicks Group presents the following update to provide insight into the group’s trading performance against the background of the Covid-19 pandemic and the resultant national lockdown. This 23-week period covers trading from the start of the second half of the group’s financial year, including the period immediately before the country entered varying levels of lockdown from March 27, 2020, and the subsequent four months of trading,” it noted.

The group added that retail health and beauty sales, including Clicks and the franchise brands of The Body Shop, GNC and Claire’s, increased by 7.7% over the corresponding 23 weeks in the previous year.

This contributed to the group’s overall retail sales growth of 6.3% for the period.

“As an essential healthcare service provider Clicks has traded throughout the lockdown period, although [the group] has been restricted to shorter trading hours and was limited to selling only essential products under lockdown level 5 until April 30, 2020,” it said.

“Trading patterns shifted as customer shopping behaviour changed in response to the various lockdown level restrictions and consumers chose to stay home to reduce the risk of contracting Covid-19,” it noted.

“Online sales in Clicks have shown significant growth since the start of lockdown. The investment made in its online and digital capability over the past four years enabled the brand to manage the increased demand and ensure an efficient and convenient service to customers,” the group added.

Clicks said that while it has experienced a decline in the frequency of customer visits during the lockdown, the average basket value of goods sold has increased during this time.

“The decline in footfall at super regional and regional malls across the country has impacted sales in destination stores. However, Clicks is well positioned in this environment with over 70% of its stores located in convenience and neighbourhood shopping centres,” it pointed out.

The group expects diluted headline earnings per share for the year ending August 31, 2020 to increase by 10% to 15% to between 730 and 763 cents (2019 FY: 663.6 cents). It noted that the figure for 2019 was restated following the adoption of IFRS 16.

“The growth in earnings is supported by the group’s tight cost management, continued working capital efficiency and the performance of UPD [United Pharmaceutical Distributors] which gained new contracts and traded strongly throughout the year,” it noted.

Listen: Clicks CEO Vikesh Ramsunder spoke to Nompu Siziba in April on it suspending dividends

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I sincerely hope they wont skip the dividend this time .

LOL – They have not had any flu shots in stock at all – I know – we tried every week !!!!!!!!!!!

Yea I got mine right in the beginning of lockdown but had to go to Dischem because they were out. I think the knock they speak of is the general flu sickness. I don’t think many people take the flu shot. Most people just get the flu and pop in for Vicks and Benylin. For all we know they had probably already stocked up on those assuming it would be another flu season.

So no flu season which has been the norm for years.

So what was Covid then?

Probably because every possible cold / flu / you name the disease – it is classified as COVID these days to scare the general public and to justify all the bad decisions made by government around COVID

I experienced cold and flu symptoms from time to time, but was so afraid that they will grab me and test me for covid, that I refused to ask my pharmacist for cold and flu medicine. I just sat tight at home and sweat it out!

I tested PCR+ early June and had more of a flu last year than this year. 2020 was more like a bad hay fever. We did get the pneunovax vaccine in about mid March.

Many people believe that multiples of our Pos cases have had the virus in SA. In our family we have A, G, M antibodies so no it was not false positive. For some weird reason more south africans get the virus but have no symptoms,

So yes, Clicks probably sold fewer flu stuff, despite one of the biggest pandemics ever.

End of comments.

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