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Clicks interim results in line with expansion plans
Clicks Group reported strong interim results for the six months ended 28 February. The pharmacy and beauty retailer group opened up 17 stores and 18 new pharmacies expanding its footprint to 680 stores and 528 pharmacies, in the last months. Clicks diluted headline earnings were up by 13.2 per cent to about 300 cents. Clicks Group CEO, Vikesh Ramsunder joins CNBC Africa to unpack the numbers.
Wed, 17 Apr 2019 15:07:32 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Clicks Group reports 13.2% increase in diluted headline earnings for the six months ending February, instilling confidence in the company's performance
- Key drivers of growth include pharmacy sales, promotions, and success of private label and exclusive brands
- Company outlines plans for capital expenditure to revamp stores, open new outlets, and enhance infrastructure to support expansion to 900 stores in South Africa
Clicks Group, a leading pharmacy and beauty retailer, has reported impressive interim results for the six months ending on 28th February. The company has been on an expansion spree, opening 17 new stores and 18 new pharmacies, thereby increasing its footprint to 680 stores and 528 pharmacies. Clicks Group CEO, Vikesh Ramsunder, joined CNBC Africa to discuss the robust numbers and shed light on the company's future plans.
One of the standout figures from the report was the 13.2% increase in diluted headline earnings, which reached about 300 cents. This growth trend has instilled confidence in the company's performance, leading to a 15% higher dividend payout compared to the prior period. Ramsunder emphasized that this decision was driven by the company's belief in returning excess cash to shareholders and its positive outlook for the future.
During the interview, Ramsunder delved into the key drivers behind Clicks Group's success in the past months. Despite low inflation rates, the company experienced significant growth in various areas. Pharmacy sales saw a remarkable increase, with volume growth exceeding turnover growth. Ramsunder also highlighted the impact of promotions in driving volume within the store network, emphasizing Clicks' commitment to offering value to customers. Additionally, the company's private label and exclusive brands, such as GNC, have witnessed strong consumer demand, indicating a shift towards more cost-effective options.
Ramsunder addressed concerns about the sustainability of the company's growth strategies, particularly focusing on the private label and exclusive brands. He expressed confidence in the sustainable nature of these initiatives, citing room for further market share growth in the pharmacy segment. The CEO also explained the positive impact of new distribution clients on the UPD side, leading to a significant profit increase of 27%.
Looking ahead, Ramsunder outlined Clicks Group's plans for the future, including a commitment to spend approximately 700 million rand on capital expenditure for the year. This budget will be allocated towards store revamping, new store openings, and enhancing infrastructure and IT platforms to support the company's expansion goals. With a target of reaching 900 stores in South Africa, Clicks Group is strategically investing in its operations to ensure sustained growth and competitiveness in the market.
The market has responded positively to Clicks Group's interim results, with the company's stock prices rising by 3%. Ramsunder expressed gratitude for the support and indicated a confident outlook for the company's continued success. As Clicks Group continues to focus on innovation, customer value, and expansion, investors and customers alike can look forward to a promising future for the renowned retailer.
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