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Clicks Group, a leading retail company, has announced its expansion plans and recent acquisition of its first 24-hour pharmacy in the Western Cape, marking a significant milestone for the company's growth strategy. The company aims to open 50 new stores and 40 pharmacies throughout South Africa in 2023, reinforcing its position in the market.
In its unaudited interim results for the six months ending on February 28, 2023, Clicks Group showcased positive performance and outlined its plans for the entire year. The company expanded its retail presence by adding 21 new stores during the first half of the year, bringing the total number of stores to 861. Moreover, Clicks opened 18 new pharmacies, extending its national pharmacy network to 691 locations.
Excitingly, Clicks recently acquired M-Kem, a well-established 24-hour pharmacy located in Bellville, Cape Town. This acquisition represents the company's first entry into the 24-hour pharmacy sector in South Africa, broadening its service offerings and catering to the evolving needs of customers.
Looking ahead, Clicks Group has set ambitious targets for 2023, planning to open 50 additional stores and 40 new pharmacies across the country. These expansion plans align with the company's long-term objective of operating 1,200 stores nationwide, demonstrating its commitment to meeting the demands of consumers in various regions.
The company is investing heavily in its growth strategy, with a record capital investment of R958 million projected for 2023. This investment includes R477 million dedicated to new stores and pharmacies, as well as the refurbishment of 45 existing stores. The remaining R481 million will be allocated to supply chain enhancements, technology upgrades, and infrastructure improvements, such as implementing battery storage at its pharmaceutical distributor's main distribution center (UPD).
Despite facing challenges such as load shedding and pressure on consumer disposable income, Clicks Group achieved remarkable turnover and profit growth. The company reported market share gains across all product categories compared to the corresponding six-month period, with group turnover increasing by 6.8% (excluding vaccinations) to R20 billion. Retail turnover experienced a robust growth rate of 11.9%, while adjusted total income rose by 8.1% to R5.8 billion.
Although headline earnings grew by 0.9% to R1.2 billion, earnings per share saw a slight decline of 4.2% to 472.1 cents. Distribution costs increased by 13.3% due to various factors, including higher fuel, security, and insurance costs, load shedding-related disruptions, and increased employment expenses to maintain service levels. Nonetheless, the company returned R1.1 billion to shareholders through dividend payments, approving an interim gross ordinary dividend increase of 2.8% for the period ending on February 28, 2023.
Clicks Group attributes its growth to the sustained post-Covid recovery in the beauty and personal care categories, reinforced by the success of the Clicks ClubCard loyalty program, which recently surpassed 10 million active members. The company emphasizes the resilience and strength of its core retail business in challenging trading conditions.
Looking forward, Clicks Group anticipates a highly constrained trading environment in 2023, characterized by elevated levels of inflation and continued disruptions caused by load shedding. However, the company's directors remain optimistic about exceeding the financial performance of the previous year, provided there are no significant changes in the regulatory landscape and the trading environment remains challenging.
Overall, Clicks Group's expansion plans, acquisition of a 24-hour pharmacy, and solid financial performance underscore its commitment to delivering quality products and services to its growing customer base in South Africa.
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