JOHANNESBURG, Oct 24 (Reuters) - South Africa’s Clicks Group reported a 16.8% rise in full-year earnings on Thursday, driven by strong growth in its retail and distribution businesses despite a weak economy.
Elevated household debts, higher fuel and electricity prices and an increase in value-added tax have squeezed consumer income in a country where economic growth has been slow.
However, competitive pricing and promotions have helped Clicks withstand sluggish consumer spending in the country.
The pharmacy and healthcare retailer said its diluted headline earnings per share (HEPS), for the year ended August, rose to 672.2 cents from 575.3 cents last year.
HEPS is the main profit measure in South Africa that strips certain one-off items.
Sales in its retail health and beauty units, which include Clicks and franchise brands GNC, The Body Shop and Claire’s, rose 10.5% due to competitive pricing, a differentiated product offer and new stores, Vikesh Ramsunder, Chief Executive of Clicks Group, said in a statement.
The group, which competes with Dis-chem Pharmacies, increased its share in the retail pharmacy market to 24.9% by August-end from 23.9%, “with one in four medicines sold in South Africa being from a Clicks pharmacy,” Ramsunder said.
United Pharmaceutical Distributors, the group’s pharmaceutical distributor, increased total managed turnover by 17.6% to 21.1 billion rand ($1.44 billion), and also expanded its market share.
“The business gained four new distribution contracts during the year, expanding its portfolio of bulk distribution clients to 30,” Clicks said.
The group increased its annual dividend by 17.1% to 445 cents per share.
$1 = 14.6318 rand Reporting by Nqobile Dludla, Editing by Sherry Jacob-Phillips