Clicks posts retail sales growth, issues positive 2020 earnings guidance

  • Total retail sales grew by 6.3%
  • Retail health and beauty sales increased by 7.7%
  • Group turnover increased by 10.2%

Harare – South Africa’s leading pharmacy, health and beauty retailer registered a growth in retail sales for the 23 weeks from 1 March 2020 to 9 August 2020 despite a challenging environment aggravated by the COVID-19 pandemic.

According to a trading update, the group said retail health and beauty sales, including Clicks and the franchise brands of The Body Shop, GNC and Claire’s, increased by 7.7% over the corresponding 23 weeks in the previous year while total retail sales grew by 6.3%.

The group also said online sales significantly grew since the start of lockdown and the investment made in its online and digital capability over the past four years enabled the brand to manage the increased demand and ensure an efficient and convenient service to customers.

During the period under review, Clicks experienced a decline in the frequency of customer visits during the lockdown while the average basket value has increased over this time.

“The decline in footfall at super regional and regional malls across the country has impacted sales in destination stores. However, Clicks is well positioned in this environment with over 70% of its stores located in convenience and neighborhood shopping centres,” said the group.

Meanwhile, UPD’s turnover for the period grew by 11.4% owing to strong growth from the private hospital channel due to increased demand for medicines and healthcare products. Sales growth was further supported by good growth from independent pharmacies and the benefit of new contracts.

Group turnover for the 23 weeks increased by 10.2%.

In a voluntary trading statement for the year ended 31 August 2020 accompanying the trading update, the group said it expects headline earnings per share for the year ending 31 August 2020 to increase by between 10% and 15% over the 663.6 cents for the 2019 financial year to between 730 and 763 cents.

The group highlighted that the growth in earnings is supported by tight cost management, continued working capital efficiency and the performance of UPD which gained new contracts and traded strongly throughout the year.

Clicks added that, “The group’s balance sheet remains robust and the business has continued to generate strong cash flows throughout the year. The directors plan to declare a full year dividend within the group’s targeted dividend payout ratio of 60% – 65%.”

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