JOHANNESBURG - South Africa's pharmacy, health and beauty retailer, Clicks Group, on Thursday reported a 10% increase in turnover to R14.4 billion in the six months to February 2018 as the retailer generated cash inflows from operations of over R1.1 billion.
The strong health and beauty sales performance increase of 14.3% produced improved margins, strong cash flows and attractive returns to shareholders.
The group’s performance for the half-year resulted in diluted headline earnings per share (HEPS) increasing by 14.8% to 266.3 cents, and interim dividend was increased by 16.5% to 102.5 cents per share, up from 88.0 cents per share in 2017.
Clicks expanded its store footprint to 646 with the opening of a net 24 stores in the past six months while Club Card active membership increased to 7.5 million as the loyalty programme attracted close to 950,000 new customers in the past year.
The group said that consumer confidence appears to be improving but it was too early for this to translate into increased disposable income.
Clicks said that the trading environment would remain relatively constrained in the second half of the financial year, adding that retail selling price inflation was anticipated to average between two percent and three percent for the financial year.
Chief executive David Kneale said that it was beauty sales contributed to Clicks gaining market share in all product categories. Kneale said that the growth was driven mainly by buoyant Christmas trading, appealing promotional offers and competitive pricing.
"The core health and beauty markets in which we operate are resilient and our market-leading brands are well positioned to increase market share in the current environment," Kneale said.
"We expect Clicks to continue its growth momentum and the chain will be opening 40 new stores this year, well ahead of the target of 25 to 30 stores."
Kneale said the group is investing over R700 million on new stores, pharmacies, store refurbishments, supply chain infrastructure and IT this year.
On the outlook for the second half, Kneale said consumer confidence appears to be improving but cautioned that it was too early for this to translate into increased disposable income.
Kneale said the group is forecasting to grow earnings by between 12% and 17% for the financial year to August 2018.