Clicks Group reports rise in annual earnings despite Covid-19
Clicks Group reported a 13.7 percent increase in annual earnings on Thursday, despite the Covid-19 pandemic, as the company continued to operate during the lockdown because it was categorised as an essential service.
Headline earnings per share (HEPS), the main profit measure in South Africa, rose to 754 cents for the year ending Aug. 31 from a restated 663.6 cents a year earlier.
Clicks, which primarily sells medicines but also health and beauty products and bulk drugs, saw its turnover for the year increase by 9.6 percent to R34.4 billion.
The company declared a dividend of 450 cents per share.
As more people stayed at home and shopped online, Clicks saw a jump in online sales, albeit from a low base, with online sales growth rocketing 361 percent in the second half of the year, the company said in a statement.
The group also benefitted from having stores in neighbourhoods.
“We have 74 percent of our stores located in convenience and neighbourhood shopping centres which largely negated the significant slowdown in foot traffic,” it said.
Sales at United Pharmaceutical Distributors (UPD) - its bulk and wholesale division - grew by 11.2 percent as it secured new contracts, the company said.
It also benefitted from an increase in orders from private hospitals and pharmacy stores during the pandemic.
Retail health and beauty division sales rose by 8.4 percent.
Clicks Chief Executive Vikesh Ramsunder warned, however, that the continuing impact of Covid-19 and the “socio-economic challenges arising from the lockdown, particularly the expected widespread job losses, will make the months ahead extremely challenging.”