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The Clicks Group [JSE:CLS] announced on Thursday that it had received a boost from a 11.7% jump in health and beauty sales, with operating profit hitting the R2bn mark for the first time in the financial year ended August 31.
The pharmacy, healthcare and beauty group said it had gained market share in all product categories, despite challenging economic conditions. “The group's operating profit increased by 12.6% to reach the R2bn mark [...] with operating margin expanding by 20 basis points to 7.0%.”
Total income grew by 10.5% to R7.9bn, due to faster growth of its retail business. However, the company noted that consumer spending came under further pressure, with lower sales of colds and flu medicines compared to last winter.
Clicks, which has 663 stores nationwide, has faced increased competition in recent years as supermarkets introduced in-house pharmacies and improved their health and beauty offerings. It is planning to invest R700m in the coming financial year in expansion projects and will open between 25 to 30 new stores and 30 to 35 new pharmacies.
Clicks owns franchise brands of The Body Shop, GNC and Claire's, which all contributed to the 11.7% increase in sales volumes. Group turnover increased by 9.1% to R29.2bn, with retail sales accelerating by 10.8%.
“The current pressures on consumer spending are unlikely to abate in the months ahead and the retail trading environment will therefore remain challenging,” said the results statement.
A R3.80 final dividend was declared, an 18% increase from last year’s dividend of R3.22. Clicks Club Card increased active membership by over 800 000 to 7.8 million, with the loyalty programme accounting for 77.2% of sales.
The group's share price was at R163.59 at 11:58, up 0.3% on the day.
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