SA’s largest pharmacy group Clicks says its administration of almost 2.5-million vaccines so far in its first half has boosted revenue growth into double digits, and it is expecting sustained demand for booster shots as SA deals with the less severe but more transmissible Omicron variant of the coronavirus.
Clicks, the private sector’s largest administrator of vaccines, on Monday reported increased sales and market share, saying its strategy of increasing the accessibility of its stores was paying off. The group wants to open as many as 30 new stores a year, and 50% of SA’s population is already within 5.5km of a Clicks pharmacy.
Group turnover rose 10.4% to R15.1bn in the 20 weeks to January 16, the group said in an update after markets closed on Monday, with vaccinations accounting for R685m, lifting retail sales by 6.9%.
Clicks said revenue growth came off a high base, 10% in the prior period, when SA was dealing with its second wave of Covid-19. That led to increased hospital admissions and greater demand for medicines compared with SA’s less severe Omicron-induced wave.
“Last year the second wave drove significantly higher sales of preventive healthcare products including supplements, immunity-building vitamins, masks and sanitisers, while the impact of Omicron this year was less severe and resulted in lower purchases of medication and immune support products,” CEO Bertina Engelbrecht said in a statement.
Clicks did not give details on the best performing products, but said same-store sales rose 11.1%, while its wholesale subsidiary, United Pharmaceutical Distributors (UPD), grew total turnover by 10.1%.
Casparus Treurnicht, a portfolio manager at Gryphon Asset Management, said Clicks appeared to have done well, but noted that both it and Dis-Chem had grown same-store sales.
“They are taking market share, but this was tilted towards the opening of new stores,” Treurnicht said.
“It appears as if the vaccination drive attracted people to their stores to complete other shopping while they were there,” said Treurnicht. “This will most probably fall off at some point this year; so let's keep an eye on new variants,” he said.
Since the start of the vaccination programme in 2021, Clicks has administered 2.4-million vaccinations and operates 435 sites across the country.
The pharmacy group noted a shift in trading patterns as lockdown restrictions eased, including an improved performance from stores in malls. Larger shopping centres had been particularly affected by Covid-19, as shoppers looked to avoid crowds to reduce the risk of infection.
“The accessibility of our store and pharmacy network has been a major strategic advantage during the pandemic,” Engelbrecht said.
Clicks had 780 stores at the end of its 2021 year with more than 70% located in convenience and neighbourhood shopping centres. The group is targeting 900 stores in SA.
In afternoon trade the group’s shares were down 0.39% to R309.30, having risen as much as 2.6% earlier. The stock has risen 17.25% over the past six months and by 20% in the past two years. Dis-Chem has risen 10% and 31.3%, respectively, over the same periods.
Update: January 25 2022
This article has been updated with additional information throughout.
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