Clicks to pay dividend amid double-digit earnings growth
Turnover rose 10% to R32.3bn in the 49 weeks to August 9, when the pharmacy group saw changes to consumer behaviour due to Covid-19
Pharmacy group Clicks will be paying a dividend in its year to end-August, having seen shifts in consumer behaviour during the Covid-19 lockdown, when many of its businesses operated as an essential service.
The group has seen double-digit earnings growth so far in its financial year, with fewer customers visiting its stores during the Covid-19 lockdown, but an increase in basket size.
Clicks said in a trading update it saw “significant” growth in online sales.
Group turnover increased by 10% to R32.3bn in the 49 weeks to August 9, Clicks said. Diluted headline earnings per share (HEPS) for the year to end-August is expected to rise by between 10% and 15% from the prior period’s 663.6c — which has been restated due to accounting changes. The group had previously reported diluted Heps of 672.2c for its 2019 financial year.
The group said its medicine distribution unit, United Pharmaceutical Distributors (UPD), fared well in 2020, increasing turnover 11.7%, having benefited from gaining new private hospital and buying group contracts.
Pharmacy sales took a hit from fewer South African catching a cold or getting flu.
“The incidence of colds and flu has been limited as South Africans are wearing face masks during the pandemic, social interaction has been limited, schooling restricted and large numbers of people are working from home,” the statement read.
Clicks said it would declare a full-year dividend, within 60%-65% payout ratio. The policy ratio is for Heps, not diluted Heps, which refers to accounting for any securities that could be converted into shares.
In morning trade on Wednesday, Clicks’s share price was up 2.37% to R234, having fallen 8.82% so far in 2020.
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