Clicks plans big capital spend

2009-10-22 15:35

Johannesburg - Consumer services group Clicks will spend R225m on capital investment in its new financial year as part of the group's expansion plans.

Announcing the results for the year to end-August 2009, Clicks said it planned to open between 20 and 30 new stores and add 30 to 40 in-store pharmacies to its existing branch network.

Clicks has 207 pharmacies in its 346 stores at present. Group CEO David Kneale said the company planned to install a pharmacy division in all its stores in the next three to five years.

Clicks' results were marked by a 26.2% growth in diluted headline earnings per share to 165.9c. Group turnover increased 8.8% to R12.2bn. The group distributed a total of 84.0c to shareholders, a 37.5% increase from the previous year.

Kneale said the group had achieved the results because of its defensive business nature as well as Clicks' strong brand as a "leading" healthcare and beauty retailer.

"We're clearly well positioned as market leaders in healthcare," said Kneale.

Swine flu spinoff

He said Clicks had also benefited from winter sicknesses as well as the swine flu that engulfed the country a few months ago, resulting in second-half sales going up 20.1% against 15% in the first half.

While the Clicks chain lifted turnover 17.7%, the group's wholesale brand UPD marginally grew turnover by 4.4% as the division was repositioned during the year.

The group was, however, negatively affected by lower disposable income in its entertainment division.

"The slowdown in discretionary spending continues to impact Musica as turnover grew by 0.8%. Musica remains the leading entertainment retailer and continues to gain market share.

"Operating profit for the period increased 0.5%, a creditable performance in the prevailing market conditions," the group said in the results statement.

It expected trading conditions to remain tight in the first six months of its new year.

Clicks shares traded for 2 285c/share on Thursday around noon after gaining 2.84%.