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Healthcare

UPDATE 2-S.Africa's Clicks Group aims to sell COVID-19 vaccine once country gets access

* Will use distribution network to sell COVID vaccine

* Will train pharmacists to administer a vaccine

* Clicks reports annual earnings jump 13.7%

* To open 30 new stores, 35 pharmacies in FY2021

* To bring back TRESemmé products on new terms (Adds CEO comments)

JOHANNESBURG, Oct 22 (Reuters) - South Africa’s biggest drugstore Clicks Group wants to utilise its reach and distribution network to sell a COVID-19 vaccine once one becomes available, its chief executive said on Thursday as the company reported a jump in annual earnings.

Clicks runs South Africa’s biggest drug distribution and bulk and wholesale supplier, called United Pharmaceutical Distributors (UPD).

CEO Vikesh Ramsunder told Reuters that the group plans to expand its network this year, opening 25-30 new stores and 30-35 pharmacies in mostly neighbourhood convenience stores.

Once a COVID-19 vaccine is developed and is manufactured in South Africa, Clicks aims to offer it in its pharmacies and would also look at training its pharmacists to administer the vaccine, Ramsunder said.

However, the company is not in any early discussions with prospective companies or the government and the final course of action will depend on government approvals, he said.

“We will be potentially able to source that vaccine from manufacturers and distribute it using our biggest distribution network,” Ramsunder said in a phone interview after the company announced a 13.7% increase in annual earnings, benefiting from rising demand for drugs during the coronavirus pandemic.

Clicks, South Africa’s second-biggest retailer by market capitalisation, was categorised as an essential service during a national lockdown during the pandemic so its stores stayed open.

It said its turnover for the year ending Aug. 31 increased by 9.6% to 34.4 billion rand ($2.11 billion) and headline earnings per share (HEPS), the main profit measure in South Africa, rose to 754 cents from a restated 663.6 cents a year earlier.

Sales at UPD, a part of its healthcare division that contributes 55% of revenues, rose 11.2% for the year, Clicks said.

The company declared a dividend of 450 cents per share.

It said it plans to increase the share of online sales, currently just around 1% of its overall revenues, to 10% in the next five years. Its online sales growth soared 361% in the second half of the year, it said.

Clicks had been under fire for posting an advert by Unilever’s TRESemmé brand that described images of African black hair as “frizzy and dull.”

The firm apologised, removed all TRESemmé brands and has said it will support more local beauty brands.

Ramsunder said the group plans to more than double its local sourcing over the next three years, but added that over time it will also bring back TRESemmé brands on new commercial terms.

He said the continuing impact of COVID-19 and the “socio-economic challenges arising from the lockdown, particularly the expected widespread job losses, will make the months ahead extremely challenging,” but said Clicks will continue with its dividend policy and will be open to share buybacks.

$1 = 16.3033 rand Reporting by Promit Mukherjee; editing by Mark Potter and Susan Fenton

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