File image: Clicks healthcare retailer. IOL.

CAPE TOWN - Clicks Group is flourishing in operating profit by 15.4% to R1.8 billion which has been driven by a robust retail health and fierce beauty sales. 

The health and beauty group’s turnover increased by 10.9% to R26.8 billion and weakened headline earnings per share by 14.5% to 502 cents. 

The group increased its operating margin by 30 basis points to 6.8%. 

The healthcare retailer retains cash abundance, with cash inflows from operations exceeding R2 billion for the first time. 

“Clicks produced another strong trading performance, led by pharmacy and front shop health sales. Our customers continue to respond positively to the Clicks value promotions and differentiated product ranges, and the chain reported strong volume growth while gaining market share in all product categories”, said Chief executive of the Clicks group, David Kneale. 

Performance 

Kneale expressed his gratification on the group’s resilient performance in tough retail trading conditions. 

This was done by raising the dividend payout ratio to 60% and announcing a dividend of 322 cents per share. Notably, this is higher than last year. 

Dividends have grown at an annual compound rate of 20.9% per annum over the past 10 years.

Clicks Group is flourishing in operating profit by 15.4% to R1.8 billion which has been driven by a robust retail health and fierce beauty sales. 

Club Card 

Clicks ClubCard reached the turning point of 7 million active members and accounted for over 77% of sales in Clicks. 

"ClubCard is integral to our digital strategy which aims to complement our store experience and enable us to better understand and engage with our customers. Customer response to the Clicks online store has been most pleasing and we extended our digital offering with the launch of the Clicks mobile app in August", said Kneale. 

New stores 

The healthcare retailer opened 111 stores during the year and expanded its store footprint to 622. 

The Clicks pharmacy network was increased to 473 following the opening of an additional 73 pharmacies. Clicks plans to increase its store base in South Africa to 900 in the longer-term, said Kneale.

Outlook

Kneale added that the retailer’s new financial year outlook is prone to incur headwinds. 

This is attributed to low economic growth and political uncertainty continue to dampen consumer confidence and constrain spending.

“The core health and beauty markets in which we trade are defensive and have proven to be relatively resilient in challenging trading conditions. We have shown our ability to trade our way through these tough conditions and believe our market-leading brands are well positioned to sustain growth in this environment.". 

Kneale added that the group is committed to investing for long-term growth and record capital investment of R680 million is planned for the 2018 financial year. 

This includes the opening of 25 to 30 new Clicks stores and 30 to 35 new pharmacies, with significant investment in the retail and pharmaceutical supply chain to support the increased scale of the group.

READ ALSO: Clicks sets its sights on 800 stores

- BUSINESS REPORT ONLINE