Cash-flush beauty retailer returns R1.2 billion to shareholders
Cash-flush pharmaceutical health and beauty retailer Clicks returned a total of R1.2 billion to its shareholders in the year to the end of August, bringing total dividends paid in the past 10 years to R7.4bn.
The group said the windfall consisted of dividend of R981 million and share buy-backs of R211m during the period.
Chief executive Vikesh Ramsunder said the group managed to increase its overall turnover by 7.2 percent to R31.4bn during the period, with operating margin expanded by 40 basis points to 7.4 percent.
Ramsunder said sales in retail health and beauty increased 10.5 percent on good volume growth as Clicks gained market share in all core product categories.
“The growth was driven by competitive pricing, a differentiated product offer and new stores,” he said.
Clicks ClubCard membership increased to 8.1 million, with the loyalty programme accounting for 78 percent of sales.
UPD, the group’s pharmaceutical distributor, increased total turnover by 17.6 percent to R21.1bn, and the business gained four new distribution contracts during the year, expanding its portfolio of bulk distribution clients to 30.
UPD also increased its share of the pharmaceutical wholesale market from 26 to 27 percent at the end of August.
The group increased its total dividend by 17.1 percent to 445 cents a share.
Ramsunder said the group managed to adapt in an environment of low economic growth and challenging trading conditions.
“We had excess cash in the business, and we wanted to reward our shareholders, as the business is cash generative,” Ramsunder said.
In February, Clicks paid out R2.8bn to its staff, at an average of R355 000 a participant, after its successful broad-based black economic empowerment share ownership scheme was vested.
Ramsunder said Clicks would add more stores to its existing 704 across the country.
“We will continue to invest domestically to increase our footprints and we have identified about 300 locations,” Ramsuder said.
Clicks opened 41 new outlets during the period and extended its pharmacy network to 545, with the opening of 35 new dispensaries during the year.
Clicks increased its share of the retail pharmacy market from 23.9 to 24.9 percent.
In the year results, Clicks reported a 16.8 percent increase in diluted headline earnings per share to 672c a share, with retail and distribution businesses both delivered strong performances in an environment of low economic growth and challenging trading conditions.
Ramsunder said the consumer spending environment would remain highly constrained.
“Clicks has adapted well to trading in this protracted economic downturn and we are confident of sustaining volume growth in the year ahead,” he said.
Clicks rose 0.24 percent on the JSE on Thursday to close at R239.58.