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2021-04-23

Clicks restores its interim dividend after last year’s suspension

The Clicks Group restored its interim dividend after suspending it last year over Covid-19 uncertainties on its operations.


Sandile Mchunu | IOL

The retail-led healthcare group yesterday declared an interim dividend of 142.5 cents a share in the six months to end February.

Last year, Clicks declared a dividend of 450c after it reported a double-digit growth in earnings during the period.

Chief executive Vikesh Ramsunder said the board approved the interim dividend as the group reported strong cash generation during the period.

Clicks reported a 11.5 percent increase in cash generated by operating activities to R1.3 billion.

“Last year we decided to suspend the interim dividend payment because of the uncertainty created by the Covid-19 outbreak,” Ramsunder said. “However, following an improvement in trading conditions we decided to restore the interim dividend this year by declaring a dividend of 142.5c.”

The group increased its turnover by 7.6 percent to R18.13bn and operating profit by 9.7 percent to R1.4bn despite operating under constrained economic conditions due to Covid-19 outbreak. Its retail health and beauty sales grew 7.2 percent, supported by front shop health sales growth of 24.7 percent attributed to the growth of customers focusing on their wellness and immune boosting vitamins and supplements.

Clicks said online sales also accelerated 167 percent and continued to be the fastest-growing section in its operations. Ramsunder said the online sales, however, still only make up 1.3 percent of the group’s total sales.

Its diluted headline earnings per share (Heps) increased by 9.5 percent to 371c and excluding the impact of Musica on Heps would have increased by 14.1 percent.

Clicks announced in January that it was closing down its iconic Musica stores on the shifting market to the consumption of music, movies and games. Ramsunder said the strength and resilience of the group’s business model was again evident in the first half performance.

“We continued to encounter the destructive impact of Covid-19 which has changed consumer shopping patterns and significantly reduced customer footfall in malls,” he said. The group’s wholesale division, United Pharmaceutical Distributors (UPD), increased total managed turnover, which combines wholesale and bulk distribution, by 18.9 percent to R13.2bn.

Ramsunder said Clicks was working closely with government departments and organisations to provide support through both Clicks and UPD for the Covid-19 vaccine roll-out programme. “A total of 62 Clicks pharmacies have so far been registered by the Department of Health to assist in phase 1 of the programme with the vaccination of healthcare workers,” he said.

Clicks retail footprint increased to 760 stores after opening 17 new stores during the period and the group plans to accelerate its store expansion programme by opening 40 new stores and 36 pharmacies this year. The group has 601 pharmacies in its portfolio.

Clicks shares declined 1.67 percent on the JSE yesterday to close at R237.90.

 


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