Janice Kew
Cosmetics and pharmaceutical retailer Clicks forecast higher earnings this year as promotional offers and new drugstores offset sustained weakness in consumer spending.
Sales growth of 14 percent in the six months to February was supported by promotional activity, which accounted for 29 percent of revenue, chief executive David Kneale said yesterday.
Cape Town-based Clicks plans to offer more discounts in the second half of the year, he said.
“I can’t see any reason consumers are going to feel more confident in the next six months,” he said.
“You’re seeing fuel prices move up again, you’ve got taxes increasing and you’ve got load shedding or the prospect of load shedding, which makes people feel uncertain as well,” he said.
The country’s shopping chains have been struggling amid unemployment of about 25 percent, high levels of personal debt and as shoppers stay away from malls during nationwide rolling blackouts.
Clicks will also boost sales through the opening of 15 new stores in the six months to August, Kneale said, including two in Namibia.
The company plans to increase the number of stores in Botswana over the next three years, and may then expand into East Africa. In South Africa, Clicks aims to have 600 stores within seven years, compared with 473 outlets now.
Diluted earnings per share, excluding one-time items, will rise 10 percent to 15 percent in the year to August, the company said in a statement. That’s in line with a 13 percent increase reported in 2014.
The retailer raised its half-year dividend by 22 percent to 65.5c per share.
The shares climbed 2.79 percent to R98.26 at the close of the JSE yesterday. – Bloomberg