Strong profit growth for Clicks, as more than half of SA now lives within 5km of its stores

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Clicks [JSE: CLS] reported strong profit growth in the year to end-August, as the group expands its network to more than 700 stores, with 545 pharmacies.

The group estimates that more than half of country’s population now live within 5km of a Clicks store, and that Clicks pharmacies now represent one in four medicines sold in the country.

Group turnover grew by 7.2% to R31.4 billion, with retail health and beauty sales increased by 10.5% thanks to competitive pricing, a differentiated product offer and the 41 new stores it opened in the past year. Its operating profit margin expanded by 40 basis points to 7.4%.

Clicks Group saw its diluted headline earnings per share grow by 16.8%. Despite the weak local economy, this is a stronger growth rate than the average of 15% per year over the past decade.

Its dividend has been hiked by 17% to 445 cents per share.

Its online store is currently the fastest growing Clicks store, says Clicks Group CEO Vikesh Ramsunder. “This has enabled Clicks to enter product categories that we prefer to sell online only, including premium beauty, health mobility and baby hardware such as prams, car seats and cots.”

Clicks ClubCard membership increased to 8.1 million, with the loyalty programme accounting for 78% of sales in Clicks. In the past year R504 million was paid to customers in cashback rewards.

UPD, the group’s pharmaceutical distributor, increased total managed turnover by 17.6% to R21.1 billion.  

Ramsunder says Clicks remains confident of sustaining volume growth in the year ahead.

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