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Clicks Group has become one of the few South African companies to record double-digit growth in profits this year thanks to high demand for health supplements, as consumers sought to strengthen their immune systems to fight Covid-19 .
Even the absence of a traditional increase in demand for winter cold and flu medications this year did not prevent the pharmaceutical retailer from increasing its health and beauty retail sales by 8.4% and operating profit by 10.4. % in the year ending August 31.
After strict cost management, the group was able to increase its total diluted earnings per share by 13.7% to 754 cents and declare a dividend of 450 cents per share for the full year. The declaration of a dividend has become an uncommon vision for local businesses choosing to preserve cash and stay liquid for the uncertain times ahead.
Clicks, which along with its subsidiary United Pharmaceutical Distributors (UPD) continued to operate throughout the shutdown, is also wary of the turbulent times ahead as South Africans continue to lose their jobs, meaning disposable household income will be even more. limited. But the group said its balance sheet remains “strong” and that it still generates strong cash flows.
The group had R2.2 billion in cash at the end of its financial year on August 31.
Clicks said its health and beauty retail sales increased 8.4%, while UPD posted 11.2% growth and continued to gain market share. In the retail sector, it was Clicks’ bias towards smaller shopping centers that helped keep sales volumes resilient.
The group said 74% of its stores are located in neighborhood and convenience malls. Meanwhile, stores in “super regional” and regional shopping malls experienced a significant slowdown in crowds after the closure began.
Clicks were also driven by a 361% increase in online sales. The group said it had been investing in the growth of its digital and e-commerce platform for the past four years.
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