Clicks Group earnings up 27% on strong retail trading
Release Date: 2010/10/21
Cape Town – Clicks Group today reported a 27.4% increase in diluted headline earnings per share to 211.4 cents for the year to 31 August 2010, driven largely by continued strong retail trading and efficient margin management.
A final distribution of 75.7 cents per share was declared, resulting in a total distribution of 106.2 cents for the year, an increase of 26.4%.
Return on equity exceeded 50% for the first time, increasing from 42.3% to 50.8% for the year.
Chief executive, David Kneale, said the robust trading and financial performance over the past year had seen the group entrench its leadership position across the health and beauty markets.
“The Clicks chain continued to deliver excellent real growth in an overall retail environment that remained challenging throughout the year, with little sign of any turnaround in consumer spending,” he said.
The group’s retail turnover increased by 14.7% to R9.7 billion for the year. This performance was largely attributable to Clicks stores which grew turnover by 16.7% and recorded market share gains across all core merchandise categories.
Clicks expanded its pharmacy network to 251 following the opening of a further 44 in-store dispensaries during the year. The chain opened a net 23 new stores to bring the total store base to 369 at year end.
The Clicks ClubCard, which is South Africa’s largest loyalty programme, passed the 3 million customer mark during the year and now accounts for close to 75% of Clicks sales.
The group’s pharmaceutical wholesaler, UPD, increased turnover by 5.2% or by 12.2% on a comparable basis as the distribution agency business is no longer reflected in turnover. Growth in wholesale turnover was mainly due to strong increases in sales to Clicks and Link pharmacies. UPD has maintained its leadership position in the private pharmaceutical wholesale and distribution market with a share of 23.7%.
Musica remains the country’s leading entertainment retailer with commanding market shares in CDs and DVDs. Turnover increased by 0.5% as discretionary spending in the entertainment market was muted throughout the period.
Discussing the group’s prospects, Kneale said “we are well positioned for growth through the expansion of the Clicks store and pharmacy network, new revenue opportunities in UPD and organic growth in the health and beauty markets.”
“However, we remain cautious on the outlook for the recovery in consumer spending in the year ahead.”
“We are pleased to report that trading for the first seven weeks of the new financial year has continued at similar levels to the second half performance of the 2010 financial year,” he added.