Major retailer opening stores across South Africa

Clicks’ latest financial results show a massive rise in profits, and the group is looking to add more stores in the coming months.

In its interim results for the six months ending 28 February 2025, the group said that its business model remained resilient and defensive and gained market share in core health and beauty categories.

The chain opened its 950th store in February and extended its national pharmacy footprint to 740. In the current financial year, Clicks has opened 29 pharmacies.

Clicks also plans to open 45 – 55 stores and 45 – 55 pharmacies in the 2025 financial year and remains committed to its medium-term target of 1,200 stores.

When it comes to its operations, the group increased the contribution of its private-label products, boosting margins and generating robust cash flows.

Clicks Clubcard also 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 Clicks sales, and members were rewarded with R438 million in cashback over the period.

United Pharmaceutical Distributors (UPD) saw turnover and trading profit growth as it continued recovering from the system’s implementation.

It also launched the first fleet of zero-emission, pharma-compliant electric vehicles.

The 42 vehicles are equipped with solar-powered refrigeration and serve customers across Gauteng and the Western Cape.

Financial performance

Group turnover jumped by 6.2% to R23.2 billion. Retail turnover, which includes Clicks, the Body Shop, M-Kem and Sorbet corporate stores, jumped by 6.4%.

The group’s headline earnings increased by 12.9% from R1.27 billion to R1.44 billion, and its headline earnings per share jumped by 13.2% to 603.9 cents per share.

The 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).

Retail turnover increased by 8.3%, excluding Unicorn Pharmaceuticals (Unicorn), which was sold in the prior financial year, and the extra trading day in the previous period due to the leap year.

Distribution turnover grew by 7.6% as UPD recovered from the impact of a large-scale implementation system at its distribution centres over the last two years.

Total income grew by 8.9% to R7.2 billion. The retail margin increased by 50 basis points due to the growth in higher-margin private-label products.

Retail costs increased by 8.5% due to a higher wage increase, the resumption of pharmacy openings, and higher electricity, card acquiring, and advertising costs.

The group’s trading profit increased by 12.6% to R2.1 billion, and its trading margin increased by 60 basis points to 9.1%.

The group’s capital expenditure of R222 million was reinvested, primarily in new stores and pharmacies, store refurbishments, supply chain and information technology.

The group’s board increased the interim gross ordinary dividend from 210 cents per share in the prior period to 238 cents per share. 

Outlook

Despite the strong results, Clicks warned that the trading environment will remain constrained in the second half of the 2025 financial year.

The half-percentage point increase in the VAT rate, effective 1 May 2025, is expected to impact consumer spending.

It added that global uncertainty and geopolitical risks could adversely affect the country’s macroeconomic outlook.

Nevertheless, the group’s management is confident it will meet its medium-term financial targets, thanks partly to its competitive advantage in the health and beauty sectors.

The group plans to invest R1 billion in capital for the full financial year, including R578 million in new stores and pharmacies and store refurbishments.

A further R447 million will go to its supply chain, technology, and infrastructure. The group also repurchased 1.1 million shares in March and April, totalling R372 million.