JOHANNESBURG – Healthcare group Clicks, which today celebrates its 50th birthday, has set its sights on expanding its footprints across the Southern African region by opening new stores and in-store pharmacies.
Significantly, Clicks achieved a milestone this year with its market capitalisation reaching the R50 billion mark, thus propelling the group to the FTSE/JSE Top 40 Index for the first time in its history.
The share price has grown by more than 25 percent in the past 12 months to reach R195.57 a share on the JSE close on Friday, up from R146.27 a year ago.
The group’s long-term goal is to expand the chain to 900 stores, with a pharmacy operating in every store.
Clicks recently opened its 500th pharmacy at Park Station to coincide with its 50th birthday.
Currently the country’s leading health and beauty retailer has more than 650 stores and more than 500 in-store pharmacies across South Africa, Namibia, Botswana, Swaziland and Lesotho.
In South Africa, the group has done well, despite the fact that consumer spending has been under pressure due to an increase in the value added tax (VAT) and a petrol price rise for five months in a row.
Chief executive David Kneale said on Friday: “We expect the consumer to be still under pressure as a result of the VAT and fuel price increases. This means consumers have hardly any remaining cash to spend. Consumer spending is therefore expected to remain constrained for the balance of the group’s financial year.”
However, the group said the core health and beauty markets in which the business operates were resilient and the group’s market-leading brands are well positioned to increase market share in the current environment.
“The directors forecast that diluted headline earnings per share for the financial year to end August will increase by between 12 percent and 17 percent as compared to the 2017 financial year,” the group said.
The group has based its forecast on the assumptions that the trading environment will remain relatively constrained in the second half of the financial year and retail selling price inflation is anticipated to average between 2 and 3 percent for the financial year.
Despite this, Clicks anticipates continuing its growth momentum and will be opening 40 new stores this year, well ahead of the target of 25 to 30 stores.
In its half-year results to end February, it reported a 10 percent increase in turnover to R14.4bn. Retail sales grew by 13.2 percent and by 7.2 percent in comparable stores, with selling price inflation of only 2.6 percent.
Total income grew by 11.7 percent to R3.9bn. The group’s total income margin improved by 40 basis points to 27.1 percent owing to the favourable mix impact from the faster growth of the retail business.