Clicks says its first half performance has recovered even though it was impacted by the Covid-19 pandemic, which has resulted in a change in consumer shopping patterns.
The health and beauty retailer reported a 7.6% rise in turnover to R18.1-billion for the six months to end-February, with retail health and beauty sales – including Clicks and international franchise brands GNC, The Body Shop and Claire’s – up 7.2%. Online sales increased by 167% over the prior period. Wholesale business United Pharmaceutical Distributors (UPD) grew turnover by 9% as it continued to gain market share, driven by strong growth in sales to private hospitals as well as new wholesale business.
The group said the comparable period wasn’t impacted by Covid-19 and included an additional trading day due to the leap year in 2020. Earnings growth was also held back by the phased closure of its chain of Musica music and video game stores, which was announced in January.
Group operating profit increased by 9.7% to R1.4-billion and diluted headline earnings per share rose 9.5% to 371c. Excluding the impact of Musica, it said diluted HEPS would have increased by about 14%. It has declared an interim dividend of 142.5c per share after ending the period with R1.1-billion in cash.
We continued to encounter the destructive impact of Covid-19 which has changed consumer shopping patterns and significantly reduced customer footfall in malls,” chief executive Vikesh Ramsunder said.
Ramsunder said Clicks was working closely with government departments and organisations to provide support for the Covid-19 vaccine rollout programme through both Clicks and UPD. A total of 62 Clicks pharmacies had so far been registered by the Department of Health to assist in phase 1 of the programme with the vaccination of healthcare workers.
Clicks said it planned to accelerate its store expansion with the opening of 40 new stores and 36 pharmacies this year as the current economic climate had presented opportunities for new retail space. It currently has 601 pharmacies and 760 stores in total.
It expected full-year diluted HEPS to be 8% to 13% higher than last year, assuming the current constrained trading environment is sustained for the balance of the period.
The roll-out of the vaccination programme is expected to aid the recovery of the economy,” Ramsunder said. “Our group has a robust balance sheet, generates strong cash flows and is well positioned for further growth as the trading environment improves.”
The company’s shares closed 1.7% down at R237.90 yesterday.
Main Image: Clicks Group Limited