Johannesburg - Large-scale retail pharmacy in South Africa moved a step closer yesterday after New Clicks (NuClicks), the listed retail group, said that it had funded the creation of a R750 million flagship pharmacy chain with several pharmacists.
NuClicks has provided R200 million to buy pharmacy groups. But because businesses are not allowed under legislation to own pharmacies, a pharmacist-owned group, Purchase Milton & Associates, will make the acquisitions.
Purchase Milton is a separate company and will be wholly owned by NuClicks once legislation allows for firms to own pharmacies. Meanwhile NuClicks will be remunerated for its services such as marketing, promotions, the establishment of an IT platform and wholesale and related logistical services until it takes ownership.
NuClicks' other exposure to pharmacies is through its 56 percent ownership of Link Investment Trust, the franchising portion of the Link group.
NuClicks has targeted retail pharmacies as part of its strategy for years, modelling itself on the successful Boots store in the UK. Purchase Milton & Associates was registered by the Pharmacy Council at the end of last month and will acquire Hyperpharm (with 17 stores); Guardian Group (six stores), Galleria Group (three stores) and the Pharmarama Group (12 stores).
NuClicks yesterday delivered a 15,6 percent rise in headline earnings a share to 34,9c in the six months to February, shrugging off low consumer confidence both in South Africa and Australia, executives said.
There had been no progress in negotiating the dispute with Heritage Collection and arbitration was scheduled to start in mid May.
Trevor Honneysett, the chief executive, said the group had achieved operating margin improvement to 6,6 percent from 6,3 percent off modest turnover growth of 10 percent to R2,3 billion.
Analysts said top line growth was slightly disappointing but this was offset by the growth in its margins.
Main profit driver NuClicks grew existing stores turnover by 7,1 percent while Priceline, the group's Australian venture, managed solid growth in the store base and market share in a tough economic climate.
NuClicks closed at R7,60, up 7c, yesterday.