Clicks plans N$780m investment in new stores and pharmacies

CHAMWE KAIRA

Clicks Group, which operates stores across Namibia plans to invest N$780 million in new stores and pharmacies in the 2027 financial year as it continues to expand its retail footprint, with total capital expenditure expected to reach N$1.5 billion.

The South African health and beauty retailer plans to open 40 to 50 new stores during the year ending August 2027, while refurbishing between 70 and 80 existing outlets.

A further N$673 million will be invested in systems, omni-channel capabilities and supply chain infrastructure.

The expansion follows a financial year in which Clicks opened a net 41 stores and 60 pharmacies, while increasing its retail pharmacy market share to 24.7%, from 24.1% in the previous year.

The group also plans to roll out 10 to 15 specialised UniCare pharmacies over the medium term and expand KwaMakhi, its neighbourhood convenience brand launched in August 2026 to target South Africa’s township market.

Clicks remains committed to its medium-term target of operating 1 200 stores.

The expansion plans were outlined in the group’s reviewed annual results for the year ended 31 August 2026, which showed turnover increasing by 5.4% to N$50.4 billion, surpassing N$50 billion for the first time.

Retail turnover rose by 4.2%, while United Pharmaceutical Distributors (UPD), the group’s distribution business, recorded a 9.2% increase in turnover, driven mainly by 19.3% growth in revenue from preferred bulk distribution contracts.

The group said trading conditions remained challenging, characterised by constrained consumer spending, low selling price inflation and aggressive competitor discounting.

Comparable store turnover increased by 1.8%, while selling price inflation averaged 1.5% for the year, down from 2.3% in the first half to 1.2% in the second half.

Total income increased by 5.1% to N$15.6 billion. Group trading profit grew by 4.7% to N$4.9 billion, although the trading margin declined by 10 basis points to 9.7%.

Retail trading profit increased by 9.9%, supported by growth in other income and cost management, while UPD’s trading profit fell by 10.4% because of a lower single exit price adjustment and the loss of distribution contracts.

Headline earnings rose by 2.7% to N$3.3 billion, while headline earnings per share increased by 4.4% to 1 422 cents.

Clicks generated N$6.3 billion in cash from operations and spent N$1.2 billion on capital expenditure during the financial year, up from N$985 million in 2025.

The investment was directed mainly towards new stores and pharmacies, refurbishments, supply chain infrastructure and information technology.

The group returned N$3.4 billion to shareholders through dividend payments of N$2.1 billion and share buybacks of N$1.3 billion. Its return on equity stood at 48.7%.

Clicks also expanded its customer loyalty programme, with active Clicks ClubCard membership reaching 13.1 million.

Members accounted for 84.2% of sales and received R976 million in cashback rewards during the year.

Looking ahead, Clicks expects the retail environment to remain highly competitive, with continued discounting as consumers face pressure from rising fuel prices and higher interest rates.