Clicks warns load-shedding poses risk to sales

© Scott Betts – 123RF.com

Its caution underscores nationwide power shortages Eskom has had to fall back on to cope with capacity contraints.

Clicks, whose brands also include Body Shop and GNC, said on Thursday it expected trading conditions to remain unchanged in the second half of the year with consumer disposable income under continued pressure.

Releasing interin results for the year to February 2015, Clicks reported a 12.8% increase in diluted headline earnings per share for the half-year to 177.6 cents. The interim dividend rose 22.4% to 65.5 cents.

Clicks chain increased sales by 10.5% and by 7.6% in comparable stores. The store footprint was expanded to 473, with 346 dispensaries and 150 clinics.

But Clicks remains upbeat.

Despite the headwinds in the consumer environment, the Clicks chain was well positioned for continuing growth, supported by a strong value proposition, the benefits of the relaunched ClubCard and a sustainable pipeline of new stores and pharmacies.

UPD would continue to entrench its leadership position in the pharmaceutical distribution market by growing scale and extracting efficiencies.

Record levels of capital expenditure of R379 million will be invested this year.

Clicks said it expected its diluted headline earnings per share for the financial year ending 31 August 2015 to increase by between 10% and 15% over the 2014 financial year.

Underpinning this forecast, the retailer said the current consumer environment would not materially deteriorate; selling price inflation would average 4% to 5% for the year; and it would continue to invest for longer-term growth, mainly in new stores and pharmacies.