South Africa’s largest pharmacy retailer, Clicks, reported an 11.5% rise in full-year earnings on Tuesday despite facing challenges such as civil unrest, power cuts, and supply chain disruptions. The company said it benefited from strong demand for health and beauty products, its resilient business model, and its loyal customer base.
Clicks operates over 900 stores across South Africa, Namibia, Botswana, Eswatini and Lesotho. It also owns the largest retail pharmacy network in the country, with over 630 pharmacies. The company said it increased its market share in all key product categories and grew its online sales by 181%.
The company’s headline earnings per share (HEPS), the main profit measure in South Africa, rose to 837.9 cents for the year ended August 31 from 751.4 cents a year earlier. Revenue increased by 9.5% to R34.4 billion ($2.3 billion), while operating profit grew by 10.6% to R3.4 billion ($228 million).
Clicks declared a final dividend of 450 cents per share, bringing the total dividend to 750 cents per share, up 11.1% from the previous year.
The company said it faced several challenges during the year, including the impact of the COVID-19 pandemic on consumer spending and behavior, the disruption caused by widespread looting and violence in July, which affected 52 of its stores and eight of its distribution centers, and the ongoing electricity crisis that resulted in frequent power outages.
Despite these difficulties, Clicks said it remained optimistic about its prospects and planned to open 40 new stores and 36 new pharmacies in the next financial year. It also said it would invest R700 million ($47 million) in capital expenditure to enhance its store network, distribution capacity, and digital capabilities.
Clicks is among the few South African retailers that have performed well amid a sluggish economy hit hard by the pandemic, social unrest, and structural constraints. The company’s share price has gained more than 20% this year, outperforming its peers such as Dis-Chem and Shoprite.
The company’s chief executive officer, Vikesh Ramsunder, said Clicks was well-positioned to benefit from the growing demand for healthcare and wellness products in South Africa, as well as the opportunities presented by the government’s National Health Insurance (NHI) scheme, which aims to provide universal health coverage for all citizens.
“We are confident that our strategy remains relevant and will continue to deliver sustainable long-term growth and returns for our shareholders,” he said.
Source: Reuters
