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Unaudited Interim Group Results for the six months ended 28 February 2025 and Cash Dividend Declaration
Clicks Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1996/000645/06
JSE share code: CLS
ISIN: ZAE000134854
CUSIP: 18682W205
LEI: 378900E967958A677472
("Clicks Group", "the group" or "the company")
UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2025
AND CASH DIVIDEND DECLARATION
KEY FEATURES
- Group turnover up 6.2%
- Retail turnover up 6.4%
- Distribution turnover up 7.6%
- Trading margin up 60 bps to 9.1%
- Diluted headline earnings per share up 13.2%
- Interim dividend up 13.3% to 238 cents per share
- R1.7 billion cash generated by operations
- Return on equity up 280 bps to 46.2%
Overview
Clicks Group continued to demonstrate the resilience and defensiveness of
its business model, gaining market share in core health and beauty
categories, increasing the contribution from private label products,
strengthening margins and generating robust cash flows.
The solid operational performance in the first half of the financial year
resulted in a 13.2% increase in the group's diluted headline earnings per
share (HEPS).
Clicks reported strong growth in front shop health and pharmacy, higher
sales of private label products and increased promotional sales. The
chain opened its 950th store in February and extended its national
pharmacy footprint to 740. Clicks has opened 29 new pharmacies to date in
the current financial year.
Clicks ClubCard grew its active loyalty membership to 12.1 million,
adding over 1 million new members in the past year. ClubCard accounted
for 81.6% of sales in Clicks and members were rewarded with R438 million
in cashback over the six-month period.
UPD continued its post-systems implementation recovery, delivering good
growth in turnover and trading profit.
Financial performance
Group turnover increased by 6.2% to R23.2 billion. Retail turnover, which
includes Clicks, The Body Shop, M-Kem and Sorbet corporate stores,
increased by 6.4%. Comparable store turnover grew by 5.4% (excluding the
extra trading day in the prior period) with inflation of 3.3% and volume
growth of 2.1%.
Retail turnover increased by 8.3% excluding Unicorn Pharmaceuticals
(Unicorn), which was sold in the previous financial year, and the extra
trading day in the prior period for the leap year.
Distribution turnover grew by 7.6% as UPD recovered from the impact of
the large-scale systems implementation undertaken across its distribution
centres in the past two years.
Total income grew by 8.9% to R7.2 billion. The retail margin expanded by
50 basis points due to the strong growth in higher margin private label
products. The distribution margin declined by 20 basis points, impacted
by the lower adjustment in the single exit price (SEP) of medicines
relative to the prior year. The group's total income margin expanded by
80 basis points to 31.0% as a result of the stronger growth of retail
relative to distribution.
Retail costs grew by 8.5% mainly due to a higher wage increase and the
resumption of pharmacy openings, as well as higher electricity, card
acquiring and advertising costs. Comparable retail costs grew by 6.0%.
Distribution costs increased by only 1.6% as the higher employment costs
to maintain service levels during the systems implementation in the
previous year were removed.
Group trading profit increased by 12.6% to R2.1 billion and the group's
trading margin increased by 60 basis points to 9.1%. The retail trading
margin was stable at 9.8%. If the intragroup profit from Unicorn is
included, the retail margin increased to 10.2%. UPD increased its trading
margin by 20 basis points to 2.6% due to the ongoing recovery from the
systems implementation.
Headline earnings grew by 12.9% to R1.4 billion. Basic earnings per share
increased by 13.1% to 603 cents and headline earnings per share increased
by 13.2% to 604 cents.
Inventory levels increased by 5.1% and group inventory days were one day
lower at 85 days. The group's net working capital days increased from 44
to 45 days.
Cash generated by operations after working capital changes totalled
R1.7 billion. Capital expenditure of R222 million was reinvested mainly
in new stores and pharmacies, store refurbishments, supply chain and
information technology. At end February 2025, the group held cash
resources of R1.7 billion.
Outlook
The trading environment will remain constrained in the second half of the
2025 financial year, with consumer spending expected to be impacted by
the VAT rate increase effective from 1 May 2025. In addition, ongoing
global uncertainty and geopolitical risks could adversely affect the
country's macroeconomic outlook.
In line with our share buy-back programme we repurchased 1.1 million
shares totalling R372 million in March and April.
Clicks plans to open 45 - 55 stores and 45 - 55 pharmacies for the 2025
financial year and remains committed to its medium-term target of 1 200
stores.
Full-year earnings forecast
The directors forecast that the group's diluted HEPS for the financial
year ending 31 August 2025 will increase by between 11% and 16% relative
to the 2024 financial year.
This forecast is based on the following assumptions:
- the retail environment is anticipated to remain constrained in H2 2025;
- the VAT rate increase is expected to impact consumer spending;
- geopolitical factors could adversely affect South Africa's
macroeconomic outlook;
- the group's full-year performance being within the published medium-
term targets; and
- no changes in the regulatory environment.
Shareholders are advised that this forecast is the responsibility of the
board of directors and has not been reviewed or reported on by the
group's independent auditor.
Interim dividend
The board of directors has approved an interim gross ordinary dividend
for the period ended 28 February 2025 of 238.0 cents per share (2024:
210.0 cents per share). The source of the dividend will be from
distributable reserves and paid in cash.
Additional information
Dividends Tax (DT) of 20% amounting to 47.6 cents per ordinary share will
be withheld in terms of the Income Tax Act. Ordinary shareholders who are
not exempt from DT will therefore receive a dividend of 190.4 cents per
share net of DT.
The company has 236 938 881 ordinary shares. Its income tax reference
number is 9061/745/71/8.
Shareholders are advised of the following salient dates in respect of the
interim dividend:
Last day to trade "cum" the dividend Tuesday, 1 July 2025
Shares trade "ex" the dividend Wednesday, 2 July 2025
Record date Friday, 4 July 2025
Payment to shareholders Monday, 7 July 2025
Share certificates may not be dematerialised or rematerialised between
Wednesday, 2 July 2025 and Friday, 4 July 2025, both days inclusive.
Mfundiso Njeke Bertina Engelbrecht Gordon Traill
Chairman Chief executive officer Chief financial officer
Cape Town
16 April 2025
This short-form announcement is the responsibility of the Clicks Group
board of directors and is a summary of the information in the detailed
interim results announcement and does not contain full or complete
details.
The full announcement can be downloaded from
https://senspdf.jse.co.za/documents/2025/jse/isse/CLS/H12025.pdf or on
the group's website at https://www.clicksgroup.co.za. The announcement is
available for inspection, at no charge, at Clicks Group's registered
office during business hours for a period of 30 calendar days following
the date of this announcement. Any investment decision in relation to
Clicks Group's shares should be based on the full announcement.
Directors: MJN Njeke*# (Chairman), BD Engelbrecht (Chief Executive
Officer), RJD Inskip*, NNA Matyumza*, SS Ntsaluba*, PM Osiris (née
Moumakwa)*, KC Ramon*, GD Traill† (Chief Financial Officer)
* Independent non-executive
# Appointed chairman on 30 January 2025 following the retirement of
David Nurek
† British
Registered office: Cnr Searle and Pontac Streets, Cape Town 8001
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor
Investec Bank Limited
Date: 16-04-2025 08:00:00
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