Share

Clicks triumphs in tough times

Johannesburg - Health and beauty group Clicks Group [JSE:CLS] on Thursday reported a 27% hike in diluted headline earnings per share to 211.4c for the year to 31 August 2010, driven largely by continued strong retail trading and efficient margin management.

A final distribution of 75.7c per share was declared, hiking its total distribution for the year to 106.2c, an increase of 26.4%.  

Group CEO David Kneale said the robust trading and financial performance over the past year had seen the group entrench its leadership position across the health and beauty markets. 

"The Clicks chain continued to deliver excellent real growth in an overall retail environment that remained challenging throughout the year, with little sign of any turnaround in consumer spending," he said.

The group's retail turnover increased by almost 15% to R9.7bn for the year. This performance was largely attributable to Clicks stores which grew turnover by 16.7% and recorded market share gains across all core merchandise categories. 

Clicks expanded its pharmacy network to 251 following the opening of a further 44 in-store dispensaries during the year. The chain opened a net 23 new stores to bring the total store base to 369 at year end. 

The Clicks ClubCard, South Africa's largest loyalty programme, passed the 3 million customer mark during the year and now accounts for close to 75% of Clicks sales.
 
The group's pharmaceutical wholesaler, UPD, increased turnover by 5.2% or by 12.2% on a comparable basis (the distribution agency business is no longer reflected in turnover). Growth in wholesale turnover was mainly due to strong increases in sales to Clicks and Link pharmacies.

UPD has maintained its leadership position in the private pharmaceutical wholesale and distribution market with a share of 23.7%. 

The group's entertainment retailer Musica posted a turnover increase of 0.5% as discretionary spending in the entertainment market was muted throughout the period. 

Discussing the group's prospects, Kneale said "we are well positioned for growth through the expansion of the Clicks store and pharmacy network, new revenue opportunities in UPD and organic growth in the health and beauty markets."
 
"However, we remain cautious on the outlook for the recovery in consumer spending in the year ahead."

Trading for the first seven weeks of the new financial year has continued at similar levels to the second half performance of the 2010 financial year. 

BEE scheme

Clicks also announced its proposed broad-based black economic empowerment scheme on Thursday.

In a statement, the company said its employees would acquire 10% of its shares in a transaction valued at R1.2bn, based on the group's market capitalisation at Wednesday's closing share price.

"Shares will be issued at market price to all permanent employees, except senior executives currently participating in the group's long-term incentive scheme."

Kneale said the scheme would enable Clicks to retain and attract scarce and specialist skills critical to the sustainability of the business.

"Pharmacists, senior black managers and longer serving employees will receive higher share allocations."

The shortage of pharmacists was one of the biggest challenges facing the business.

"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."

Approximately 70% of the shares would be allocated to black people, with 60% of these being black women.

The scheme was subject to shareholder approval at a general meeting in January 2011.

-  Fin24
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.3%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.48
-0.1%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
896.95
-1.0%
Palladium
1,000.11
-0.2%
Gold
2,194.20
-0.0%
Silver
24.51
-0.6%
Brent Crude
86.09
-0.2%
Top 40
68,007
+0.5%
All Share
74,221
+0.4%
Resource 10
56,323
+1.2%
Industrial 25
103,552
+0.3%
Financial 15
16,559
+0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders