Clicks revenue surpasses R50bn, thanks to aggressive store expansion

Clicks Group’s strategy of expanding its retail and pharmacy footprint is bearing fruit, resulting in the company’s turnover surpassing R50-billion for the first time.

This was contained in the JSE-listed Clicks Group’s set of annual results for the year ended 31 August 2026.

The growth comes despite weak consumer spending and intense market competition.

Group turnover increased 5.4% to R50.4 billion, while headline earnings rose 2.7% to R3.32 billion. Diluted headline earnings per share increased 4.4% to 1,421.7 cents, enabling the retailer to raise its total dividend by 4.4% to R9.25 per share.

The healthcare and beauty retailer said trading conditions remained challenging throughout the year, with consumers facing ongoing financial pressure and competitors engaging in aggressive discounting.

Consumer headwinds weigh on sales

Low selling price inflation and operational disruptions linked to the delayed implementation of a warehouse management system at its Cape Town distribution centre also weighed on performance.

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Retail sales, including Clicks, UniCare, The Body Shop, Sorbet and the newly launched KwaMakhi convenience format, increased by 4.2%, while comparable store sales grew by 1.8%.

Selling price inflation averaged only 1.5% during the year, declining to 1.2% in the second half. Despite subdued sales growth, the retail division delivered stronger profitability.

Retail division rings tills

Retail trading profit increased 9.9%, supported by supply chain efficiencies, higher other income and disciplined cost management.

Retail trading margin improved to 11% from a normalised 10.8% in the previous year. The group continued to gain share in the country’s pharmacy market, increasing its market share to 24.7% from 24.1%.

During the year it added a net 41 stores and 60 pharmacies, ending the period with 1,110 stores and 840 pharmacies. This saw the group’s permanent employees increase to 21,216 permanent employees, from 20,102. This means retail employees numbered 20,689 and distribution employees 527.

Pharmacy expansion continues

Four specialised 24-hour UniCare pharmacies were also opened. However, performance at pharmaceutical wholesaler UPD was less robust.

While distribution turnover increased 9.2%, largely due to a 19.3% increase in preferred bulk distribution contracts, trading profit declined 10.4%.

The decline was attributed to a lower Single Exit Price (SEP) adjustment and the loss of two distribution contracts, causing distribution margins to fall to 2.7% from 3.3%.

Distribution margins under pressure

As a result, group trading profit increased 4.7% to R4.9 billion while the group’s trading margin edged lower to 9.7% from 9.8% a year earlier. Cash generation remained a key feature of the business.

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The group generated R6.3 billion in cash from operations and improved net working capital days from 34 to 33, despite increasing inventory levels to support store expansion, new product launches, medical consumables and growing demand for GLP-1 products.

Management accelerated investment in future growth initiatives, increasing capital expenditure by 18.4% to R1.17 billion.

Investment and capital expenditure

Spending was directed primarily towards new stores and pharmacies, refurbishments, supply chain infrastructure and information technology systems.

The company also remained active on the acquisition front. During the year, UPD acquired a medical consumables distributor, broadening its healthcare offering and strengthening its hospital-focused product range.

The group also acquired a 74% stake in Mr First Aid Proprietary Limited for a net cash outlay of R13.3 million.

Acquisition strategy builds healthcare portfolio

In a further move to expand its beauty portfolio, the group announced after year-end that it had agreed to acquire an additional 35.3% stake in premium beauty retailer ARC Store, operated through Mistragystix Proprietary Limited, for R507 million.

The transaction will increase Clicks’ shareholding to 61%, subject to regulatory approval. Chief executive officer Bertina Engelbrecht said the group would continue investing in growth platforms including Sorbet, ARC Store, UniCare, KwaMakhi, medical consumables and digital capabilities.

The group plans capital expenditure of R1.5 billion in the financial year 2027, including significant investment in store expansion, refurbishment programmes, supply chain enhancements and omni-channel capabilities.

The company also revealed that the total employment costs were R5.41 billion, rising marginally by 2.4% from R5.28 billion in the previous financial year.

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