Clicks sales increase despite low growth

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“The pressure is evident in the low level of real growth in the private healthcare market and the continued reliance on promotional activity to drive volume in the health and beauty markets. These factors have also contributed to selling price inflation remaining constrained,” the group said in a statement.

The group’s Clicks chain however managed to increase sales growth in the second half of the year, and its distribution business United Pharmaceutical Distributors (UPD) increased total managed turnover by 43.9 per cent to 11.5 billion rand.

Group turnover was also up 13.6 per cent from 15.4 billion rand in the previous year to 17.5 billion rand. Operating profit however grew slightly from one billion rand to 1.3 billion rand.

The group’s retail sales growth was largely driven by the 8.6 per cent sales increase in Clicks, as well as comparable store sales growing by 5.8 per cent.

Clicks additionally opened 22 stores, extending the chain’s footprint to 442 stores and 331 in-store pharmacies. Membership of the Clicks ClubCard loyalty programme has grown to 4.1 million rand.

“The group remains strongly cash generative with cash inflow from operations increasing 33 per cent to 1 013 million rand, mainly through improved management of working capital,” the group explained.

“During the year 748 million rand was returned to shareholders through dividend payments and share buy-backs as part of the group’s ongoing commitment to return excess cash to shareholders.”

Entertainment retail brand Musica and The Body Shop are also a part of the group. Turnover for The Body Shop increased by 11.3 per cent. The increase was due to the opening of four new stores during the year.

UPD also increased turnover by 22.8 per cent, growing its share of the pharmaceutical wholesale market from 24.3 per cent to 26.7 per cent.

“The group remains focused on delivering excellence in health and beauty retailing and healthcare supply management,” the group said.

“The current weak consumer spending environment is anticipated to continue and trading over the important festive season period will be critical to performance in the year ahead.”