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Clicks beats the winter blues with strong earnings
Clicks beats the winter blues with strong earnings. The pharmacy, health and beauty chain has reported a strong rise in earnings despite pressure on consumers and depressed cold and flu medicine sales
Fewer South Africans suffered from colds and flu this past winter - good news for them but not for Clicks.
The pharmacy, health and beauty chain cites depressed medicine sales as one of the several headwinds it encountered in the second half of its financial year. Increasing pressure on consumer spending and near-zero selling price inflation were a couple of the others.
Still, it managed to grow health and beauty sales by 11.7% over the year to end-August due to higher volumes and market share gains in all product categories. Pharmaceutical distributor UPD also performed well, maintaining its operating margin despite the low increase granted on the single exit price (SEP) of medicines this year.
Turnover rose 9.1% to R29.2 billion, with retail sales growing by 10.8% and distribution turnover by 8.4%. Selling price inflation averaged 1.9% for the year compared to 5.3% last year. Operating profit increased by 12.6% to reach the R2 billion mark for the first time, with its operating margin expanding by 20 basis points to 7%. Diluted headline earnings per share increased by 15.1% to 578c and it's raised its total dividend by 18% to 380c per share as it increased its payout ration from 60% to 62%.
Clicks said the retail trading environment would remain challenging with current pressures on consumer spending unlikely to abate in the months. It plans to spend R700 million in the year ahead as it opens 25 to 30 new Clicks stores and 30 to 35 new pharmacies. It will also refurbish 60 stores and upgrade its retail and pharmaceutical supply chain and IT systems to support the expansion.
The group's core health and beauty markets and business model are resilient," Clicks said. "The business continues to trade well in these challenging economic conditions and management is confident of maintaining sales momentum and sustaining volume growth in the year ahead."
Its shares jumped 6.8% to R174 yesterday.
Clicks results good in a really tough environment. In share price at a 28pe health and beauty very good and excellent cash generation. Earnings up 15% dividends up 18%
-- Wayne McCurrie (@WayneMcCurrie) October 25, 2018
Clicks: very good result. Other income only 85% of ebit growth
-- Jse_Prophet (@JseProphet) October 25, 2018
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By INCE|Connect NewsClicks beats the winter blues with strong earnings. The pharmacy, health and beauty chain has reported a strong rise in earnings despite pressure on consumers and depressed cold and flu medicine sales
Fewer South Africans suffered from colds and flu this past winter - good news for them but not for Clicks.
The pharmacy, health and beauty chain cites depressed medicine sales as one of the several headwinds it encountered in the second half of its financial year. Increasing pressure on consumer spending and near-zero selling price inflation were a couple of the others.
Still, it managed to grow health and beauty sales by 11.7% over the year to end-August due to higher volumes and market share gains in all product categories. Pharmaceutical distributor UPD also performed well, maintaining its operating margin despite the low increase granted on the single exit price (SEP) of medicines this year.
Turnover rose 9.1% to R29.2 billion, with retail sales growing by 10.8% and distribution turnover by 8.4%. Selling price inflation averaged 1.9% for the year compared to 5.3% last year. Operating profit increased by 12.6% to reach the R2 billion mark for the first time, with its operating margin expanding by 20 basis points to 7%. Diluted headline earnings per share increased by 15.1% to 578c and it's raised its total dividend by 18% to 380c per share as it increased its payout ration from 60% to 62%.
Clicks said the retail trading environment would remain challenging with current pressures on consumer spending unlikely to abate in the months. It plans to spend R700 million in the year ahead as it opens 25 to 30 new Clicks stores and 30 to 35 new pharmacies. It will also refurbish 60 stores and upgrade its retail and pharmaceutical supply chain and IT systems to support the expansion.
The group's core health and beauty markets and business model are resilient," Clicks said. "The business continues to trade well in these challenging economic conditions and management is confident of maintaining sales momentum and sustaining volume growth in the year ahead."
Its shares jumped 6.8% to R174 yesterday.
Clicks results good in a really tough environment. In share price at a 28pe health and beauty very good and excellent cash generation. Earnings up 15% dividends up 18%
-- Wayne McCurrie (@WayneMcCurrie) October 25, 2018
Clicks: very good result. Other income only 85% of ebit growth
-- Jse_Prophet (@JseProphet) October 25, 2018