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Johannesburg – Beauty and pharmacy retailer the Clicks Group [JSE:CLS] has budgeted R250m for capital expenditure in the new financial year, the bulk of which is earmarked for store roll-out and further development of in-store pharmacies at its outlets.
Clicks CEO David Kneale said on Thursday the group plans to open between 20 and 30 stores, and erect between 30 and 40 in-store pharmacies in the new financial year.
Of the R250m capex announced, R131m is for store expansion and R78m for IT systems.
In the year to end August 2010, Clicks grew its in-store dispensaries to 251 after opening 44 new pharmacies, becoming the largest employer of pharmacists in a country plagued with a serious shortage of pharmacists.
Though margins are said to be low, other big retailers, notably Shoprite, Pick n Pay and lately Spar, have also been developing in-store pharmacies, displacing independent pharmacists and creating tough competition for unlisted Dis-Chem.
Kneale said the group’s medium-term goal (about three to five years) is to grow its network of 360 Clicks stores to 500, all with in-store dispensaries.
“The shortage of pharmacists is a constraint,” said Kneale. “If we had more pharmacists in the country, we would grow faster than we have.”
The group also announced a R1,2bn broad-based employee share ownership scheme which will see 10% of the group’s shares issued to employees.
It said shares will be issued at market price to all permanent employees, except senior executives currently participating in the group’s long-term incentive scheme.
Approximately 70% of the shares will be allocated to black people, with 60% of these being black women, added Kneale.
“This scheme will enhance our ability to attract pharmacists into Clicks and give them an opportunity to share in the long-term growth and capital appreciation of the group,” said Kneale.
“Extending share ownership to all employees will accelerate transformation and build on the progress we have made across the other areas of black economic empowerment, particularly employment equity, skills development, preferential procurement and socio-economic development,” he said.
Other than the flagship Clicks chain, the group owns pharmaceutical wholesaler UPD, entertainment chain Musica and The Body Shop, which markets beauty products focussing on the middle to upper income groups.
Kneale said there are plans to incorporate The Body Shop in 35 Clicks outlets during the current year, building some form of an emporium.
The emporium format has worked well for clothing retailer Truworths, whose store design puts all its brands under one roof, reporting to one manager.
In the year under review, Clicks posted a 27.4% rise in diluted headline earnings per share (Heps) to 211.4 cents and declared a final distribution of 75.7 cents per share.
Makwe Masilela, an analyst at stockbroker BP Bernstein, was pleased with the group’s lifting of the operating margin from 5.8% to 6.2%, given the current trading conditions which is characterised by consumer restraint.
Clicks said its loyalty programme ClubCard passed the 3 million customer mark during the year and now accounts for close to 75% of Clicks sales.
Masilela noted the company’s diluted Heps has grown at a compound rate of 29.8% over the past five years.
“It’s not often (we) get such a compound growth rate and very few companies can afford to embark on a share buy-back programme in these economic conditions,” he said.
Clicks’ share price has doubled from 2282 cents in October last year to the current selling price of 4500 cents.
- Fin24.com
Clicks CEO David Kneale said on Thursday the group plans to open between 20 and 30 stores, and erect between 30 and 40 in-store pharmacies in the new financial year.
Of the R250m capex announced, R131m is for store expansion and R78m for IT systems.
In the year to end August 2010, Clicks grew its in-store dispensaries to 251 after opening 44 new pharmacies, becoming the largest employer of pharmacists in a country plagued with a serious shortage of pharmacists.
Though margins are said to be low, other big retailers, notably Shoprite, Pick n Pay and lately Spar, have also been developing in-store pharmacies, displacing independent pharmacists and creating tough competition for unlisted Dis-Chem.
Kneale said the group’s medium-term goal (about three to five years) is to grow its network of 360 Clicks stores to 500, all with in-store dispensaries.
“The shortage of pharmacists is a constraint,” said Kneale. “If we had more pharmacists in the country, we would grow faster than we have.”
The group also announced a R1,2bn broad-based employee share ownership scheme which will see 10% of the group’s shares issued to employees.
It said shares will be issued at market price to all permanent employees, except senior executives currently participating in the group’s long-term incentive scheme.
Approximately 70% of the shares will be allocated to black people, with 60% of these being black women, added Kneale.
“This scheme will enhance our ability to attract pharmacists into Clicks and give them an opportunity to share in the long-term growth and capital appreciation of the group,” said Kneale.
“Extending share ownership to all employees will accelerate transformation and build on the progress we have made across the other areas of black economic empowerment, particularly employment equity, skills development, preferential procurement and socio-economic development,” he said.
Other than the flagship Clicks chain, the group owns pharmaceutical wholesaler UPD, entertainment chain Musica and The Body Shop, which markets beauty products focussing on the middle to upper income groups.
Kneale said there are plans to incorporate The Body Shop in 35 Clicks outlets during the current year, building some form of an emporium.
The emporium format has worked well for clothing retailer Truworths, whose store design puts all its brands under one roof, reporting to one manager.
In the year under review, Clicks posted a 27.4% rise in diluted headline earnings per share (Heps) to 211.4 cents and declared a final distribution of 75.7 cents per share.
Makwe Masilela, an analyst at stockbroker BP Bernstein, was pleased with the group’s lifting of the operating margin from 5.8% to 6.2%, given the current trading conditions which is characterised by consumer restraint.
Clicks said its loyalty programme ClubCard passed the 3 million customer mark during the year and now accounts for close to 75% of Clicks sales.
Masilela noted the company’s diluted Heps has grown at a compound rate of 29.8% over the past five years.
“It’s not often (we) get such a compound growth rate and very few companies can afford to embark on a share buy-back programme in these economic conditions,” he said.
Clicks’ share price has doubled from 2282 cents in October last year to the current selling price of 4500 cents.
- Fin24.com
