Clicks Group has delivered a 6.4% rise in half-year headline earnings to R1.5 billion, despite facing constrained consumer spending and internal operational disruptions. The retailer, which continues an aggressive store expansion programme, reported turnover for the six months through February of R24.9 billion, a 7.4% increase over the same period last year.
Headline earnings per share rose by a stronger 8.1% to 653 cents, reflecting the benefit of share buybacks conducted over the previous 18 months. An interim dividend of 258 cents per share was declared, representing an 8.4% year-on-year increase.
The group’s trading profit advanced 7.4% to R2.3 billion, while the trading margin was maintained at 9.1%.
Cash generated from operations stood at R1.9 billion. Retail turnover, which encompasses the Clicks, UniCare, The Body Shop, and Sorbet corporate store brands, increased by 5.4%, with comparable store turnover 3.1% higher. Selling price inflation averaged 2.3% over the six-month period, suggesting modest pricing power in a competitive discounting environment. The distribution business, UPD, posted stronger growth of 13.0%, driven largely by a 31.1% surge in revenue from preferred supplier bulk contracts.
Pharmacy sales rose 8.6%, allowing Clicks to grow its retail pharmacy market share to 24.9%, up from 24.2% in the prior comparable period. This gaining of share in a defensive healthcare category provides some insulation against discretionary spending weakness. However, the group’s retail performance was hampered by delays in implementing a new warehouse management system at its Cape Town distribution centre. Management estimates that this systems issue reduced retail turnover by approximately R175 million, or 0.9% of retail sales, with product availability particularly affected in Western Cape and Eastern Cape stores during the crucial festive trading season. Availability has since recovered to targeted levels. Aggressive discounting by competitors over the same period added further pressure.
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Clicks expanded its total store footprint to 1,003 locations during the half, while its national pharmacy network grew to 795 outlets. The group plans to open between 40 and 50 new stores and a matching number of new pharmacies across the full 2026 financial year. Additionally, ten differentiated concept stores are scheduled for pilot testing in the second half. The Clicks ClubCard loyalty programme grew its active membership by 800,000 to 12.9 million, with loyalty members accounting for 83.7% of Clicks-branded sales. Members received R527 million in cashback rewards during the six-month period.
The UPD wholesale division delivered strong growth in both its core wholesale and preferred supplier bulk channels, though management acknowledged that the business remains constrained in the hospital and independent pharmacy segments. Capital expenditure of R311 million was invested primarily in new stores and pharmacies, store refurbishments, supply chain upgrades, and information technology systems. For the full 2026 financial year, the group plans total capital expenditure of R1.3 billion, which includes R662 million allocated to new stores and pharmacies alongside the refurbishment of 80 to 90 existing locations. A further R594 million will be directed toward supply chain improvements, IT infrastructure, and related projects.
Looking ahead, the group has warned that the consumer environment is expected to remain under significant pressure in the second half, with rising fuel prices and associated inflationary trends constraining household disposable income. UPD recently acquired a medical consumables business and is preparing to launch this offering to its customer base. Clicks reaffirmed its commitment to achieving its medium-term financial targets, as well as its store target of 1,200 outlets. The company has forecast a 4% to 9% increase in full-year diluted headline earnings per share, a range that assumes the retail environment stays constrained and that geopolitical conflict continues to negatively affect South Africa’s macroeconomic outlook and growth prospects.