• Group turnover increased by 9.9% to R16.9   billion. Retail sales grew by 8.6% and by 5.0% in comparable stores, with   selling price inflation of 2.7%. Distribution turnover increased by 12.3%   with price inflation of 2.4% for the half-year.

  • Group operating profit increased by 9.4% to   R1.2 billion, with the group’s operating margin constant at 7.4%. Headline   earnings grew by 13.1% to R851.2 million. Headline earnings per share   increased by 10.4% to 338 cents. Due to the uncertainty surrounding the   Covid-19 virus, no interim dividend was declared.

  • Cash generated by operating activities   before dividends paid increased by 2.9% to R1.2 billion for the six months.   Capital expenditure of R309 million was invested mainly in new stores and   pharmacies, store refurbishments, supply chain and information technology.

  • The group returned R822 million to   shareholders in dividend payments, 20.5% higher than the prior period. Cash   and cash equivalents increased by R857 million and the group had cash   resources of R2.3 billion at the end of February 2020. Subsequent to the   reporting period the group repurchased 2,862 ,264 shares for a total   consideration of R653.3 million as part of its ongoing capital management   strategy aimed at enhancing returns to shareholders.

  • · Retail health and beauty sales, which   includes Clicks and the franchise brands GNC, The Body Shop and Claire’s,   increased by 9.6%, driven by competitive pricing, differentiated product   ranges, the Clicks ClubCard and new stores. Clicks opened 17 stores in the   six months to expand its retail footprint to 721 stores and increased its   pharmacy network to 572 following the opening of 27 pharmacies. Clicks   increased its share of the retail pharmacy market from 24.1% to 24.6% at   February 2020. UPD, Click’s wholesale pharmaceutical business, grew wholesale   turnover by 17.6% as the business gained new private hospital and buying   group contracts. This contributed to UPD increasing its market share from   26.0% to 27.2% at February 2020.

  • Click’s warned that trading conditions are   expected to be extremely tough for the remainder of the financial year as the   extent and economic impact of the Covid-19 pandemic are unknown. This could   be compounded by electricity load shedding which remains a risk to retail   sales, particularly in the higher-demand winter season. The recent sharp   depreciation in the value of the Rand could impact on selling price inflation   towards the end of the financial year and place further pressure on   constrained consumers. Despite the headwinds from the group is confident that   it is well positioned in its core markets to respond to the needs of retail   and distribution customers during this time of uncertainty and crisis.

  • Clicks remains an exceptional company, with   the Group generating a return on equity of just under 35%. The company also   continues to gain market share across numerous product lines and in our view   is ideally placed to gain further market share in the current turmoil from   weaker competitors. Despite the undoubted quality of the business, Clicks   trades at 35x historical earnings (trailing twelve months) which in our view   is excessive. As such we continue to await a more attractive entry point to   purchase the share.