CLICKS GROUP SALES UP 15% AND DIVIDEND RAISED BY 24%
Cape Town – Clicks Group delivered another good trading performance in the year to August 2015 as turnover increased by 15.3% to R22.1 billion and diluted headline earnings per share grew by 14% to 384 cents.
The annual dividend was increased by 23.7% to 235 cents per share and the group generated a total shareholder return of 35.8% for the year.
Commenting on the trading performance in a difficult economic climate, chief executive David Kneale said the group’s retail brands all reported real volume growth and the Clicks chain continued to gain share of the health and beauty markets.
Clicks increased sales by 10.9%, driven by price competitiveness and effective promotions. Clicks opened 22 new stores and 22 new pharmacies, growing the chain to 486 stores, with 361 pharmacies and 157 in-store clinics.
The ClubCard loyalty programme, which accounts for 75% of Clicks sales, increased its active membership to 5 million.
The group's exclusive health and beauty franchise brands, The Body Shop, GNC and the recently launched Claire’s brand, continue to differentiate the Clicks offer. The Body Shop, which increased turnover by 12.7%, has 50 standalone stores and a presence in 86 Clicks stores. GNC has four stores and a presence in 257 Clicks stores while Claire’s opened its first store in July 2015 and now has ranges available in 77 Clicks stores.
Musica increased sales by 2.3% as the brand continued to gain market share.
UPD benefited from the growth in its preferred supply chain partner distribution contracts and increased turnover by 21.6%. UPD now has market leading positions in both the pharmaceutical wholesale and distribution markets.
The group remains highly cash generative and increased cash inflow from operations before working capital to R1.7 billion. "In line with our commitment to return surplus cash to shareholders, R667 million was returned through dividends and share buy-backs. Over the past five years the group has returned R3.3 billion to shareholders," he said.
Discussing the outlook for the year ahead, Kneale said consumer spending is unlikely to improve in the short term which will ensure the retail trading environment remains constrained. UPD is likely to face a demanding year owing to the ongoing margin pressure from the faster growth in generic medicines.
"However, we have a portfolio of strong, market-leading brands which have the capacity to increase market share over the medium term," he said.
Record capital expenditure of R432 million is planned for the 2016 financial year. Clicks aims to open 20 to 25 new stores and 25 to 35 new pharmacies, while 50 stores will be refurbished.