October 26, 2017 / 7:49 AM / a year ago

UPDATE 1-Health and beauty boost profits at South Africa's Clicks

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JOHANNESBURG, Oct 26 (Reuters) - South African retailer Clicks reported a 14.5 percent rise in annual headline earnings on Thursday powered by health and beauty products and pricing aimed at thrifty consumers in a weak economy.

Diluted headline earnings per share rose to 502.1 cents for the year ended August 31 while operating profit rose 15.4 percent to 1.8 billion rand ($127.43 million).

“The core health and beauty markets in which we trade are defensive and have proven to be relatively resilient in challenging trading conditions,” Chief Executive David Kneale said in a statement.

Kneale expects the retail sector to face headwinds in the new financial year as slow economic growth and political uncertainty dampen consumer confidence and spending.

South African shoppers are feeling the impact of subdued wage growth, little to no job creation and creeping inflation, and recent surveys have shown a slip in consumer confidence.

The Treasury on Wednesday lowered its forecast for this year’s economic growth to 0.7 percent from 1.3 percent.

The pharmacy, health and beauty retailer declared a dividend of 322 cents per share, up 18.4 percent from last year.

Clicks opened 111 stores during the year for a total of 622, while its pharmacy network increased by 73 to 473, it said.

$1 = 14.1250 rand Reporting by Nqobile Dludla; editing by Tiisetso Motsoeneng and Jason Neely

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