Wrap Text
Annual Group Results for the year ended 31 August 2019 and cash dividend declaration
CLICKS GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1996/000645/06
JSE share code: CLS
ISIN: ZAE000134854
CUSIP: 18682W205
("Clicks Group" or "the group")
ANNUAL GROUP RESULTS FOR THE YEAR ENDED 31 AUGUST 2019 AND CASH DIVIDEND DECLARATION
Group turnover up 7.2%
Health and beauty sales up 10.5%
Operating margin up 40 bps to 7.4%
Cash generated by operations R2.9 billion
Diluted HEPS up 16.8%
Total dividend up 17.1%
OVERVIEW
Clicks Group posted another year of strong growth as both the Retail and Distribution businesses
delivered highly competitive performances in an environment of low economic growth and challenging
trading conditions.
Retail health and beauty sales increased by 10.5% on good volume growth as Clicks gained market
share across all its core product categories.
UPD also performed well, growing its operating margin by gaining new bulk distribution contracts
while also reporting growth in market share.
The group's headline earnings per share and earnings per share rose by 12.2% to 684 cents.
Diluted headline earnings per share increased by 16.8% to 672 cents.
The total dividend grew by 17.1% to 445 cents per share, with the dividend payout ratio being
increased from 62% to 65%.
FINANCIAL PERFORMANCE
Group turnover increased by 7.2% to R31.4 billion. Retail sales grew by 9.7% and by 6.4% in
comparable stores, with selling price inflation of only 1.5%. Distribution turnover increased by
4.0% with price inflation of 0.9% for the year.
Total income grew by 9.7% to R8.7 billion, with the group's total income margin strengthening by
60 basis points to 27.6%. The Retail margin was impacted by increased transport costs and product
mix. The UPD margin benefited mainly from gaining new distribution contracts.
Group operating profit increased by 14.2% to R2.3 billion, with the group's operating margin
expanding by 40 basis points to 7.4%. The Retail and Distribution businesses both improved
operating margins despite the low inflationary environment and challenging trading conditions.
Working capital continues to be efficiently managed and the group's net working capital improved
from 36 to 34 days.
Cash generated by operations increased by 19.5% to R2.9 billion. Capital expenditure of
R647 million (2018: R671 million) was invested mainly in new stores and pharmacies, store
refurbishments, supply chain and information technology.
The group returned R1.2 billion to shareholders in dividend payments (R981 million) and share
buy-backs (R211 million).
TRADING PERFORMANCE
Retail health and beauty sales, which includes Clicks and the franchise brands, GNC, The Body Shop
and Claire's, increased by 10.5%, driven by competitive pricing, a differentiated product offer
and new stores. Sales in comparable stores increased by 6.9% and showed strong volume growth of
5.8%, with inflation of only 1.1% for the year.
Clicks opened its 700th store in August 2019, ending the year on 704 stores, and increased its
pharmacy network to 545 pharmacies. Clicks increased its share of the retail pharmacy market from
23.9% to 24.9% at August 2019 (source IQVIA).
UPD's total managed turnover, combining wholesale and bulk distribution, increased by 17.6% to
R21.1 billion. The business gained four new distribution contracts in the past year, increasing its
portfolio of bulk distribution clients to 30. UPD grew wholesale turnover by 6.8% and increased
its market share from 26.0% to 27.0% at August 2019 (source IQVIA).
OUTLOOK
While the consumer spending environment will continue to be constrained in the year ahead,
the group has adapted well to trading in this protracted economic downturn and the group is
confident of sustaining volume growth in the year ahead.
The group operates in growing and defensive health and beauty markets where the strategy and
business model have proven to be resilient, ensuring that the group's market-leading brands are
well positioned to increase market share.
DIVIDEND DECLARATION
FINAL DIVIDEND
The board of directors has approved a final gross ordinary dividend for the period ended
31 August 2019 of 327.0 cents per share (2018: 277.5 cents per share). The source of the dividend
will be from distributable reserves and it will be paid in cash.
ADDITIONAL INFORMATION
Dividends Tax (DT) of 20% amounting to 65.4 cents per ordinary share will be withheld in terms of
the Income Tax Act. Ordinary shareholders who are not exempt from DT will therefore receive a
dividend of 261.6 cents net of DT.
The company has 262 083 439 ordinary shares in issue. Its income tax reference number
is 9061/745/71/8.
Shareholders are advised of the following salient dates in respect of the final dividend:
Last day of trade "cum" the dividend Tuesday, 21 January 2020
Shares trade "ex" the dividend Wednesday, 22 January 2020
Record date Friday, 24 January 2020
Payment to shareholders Monday, 27 January 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 22 January 2020
and Friday, 24 January 2020, both days inclusive.
The board of directors has determined that dividend cheques amounting to R50.00 or less due to any
ordinary shareholder will not be paid unless a written request to the contrary is delivered to the
transfer secretaries, Computershare Investor Services Proprietary Limited, by no later than close
of business on Tuesday, 21 January 2020, being the day the shares trade "cum" the dividend.
Unpaid dividend cheques will be aggregated with other such amounts and donated to a charity to be
nominated by the directors.
David Nurek Vikesh Ramsunder Michael Fleming
Chairman Chief executive officer Chief financial officer
This short-form announcement is the responsibility of the Clicks Group board of directors
and is a summary of the information in the detailed annual results announcement and does
not contain full or complete details. The full announcement can be downloaded from
https://senspdf.jse.co.za/documents/2019/jse/isse/CLS/FYresults.pdf or on the group's website
at http://www.clicksgroup.co.za. The announcement is available for inspection, at no charge, at the
company's registered office during business hours for a period of 30 calendar days following
the date of this announcement. Any investment decision in relation to the company's shares
should be based on the full announcement.
Directors: DM Nurek* (Chairman), F Abrahams*, JA Bester*, F Daniels*, BD Engelbrecht, M Fleming
(Chief Financial Officer), NN Gobodo*, V Ramsunder (Chief Executive Officer), M Rosen*
* Independent non-executive
Registered office: Cnr Searle and Pontac Streets, Cape Town 8001
Transfer secretaries: Computershare Investor Services Proprietary Limited
http://www.clicksgroup.co.za
Cape Town
24 October 2019
Sponsor
Investec Bank Limited
Date: 24/10/2019 08:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.