Clicks sold double the number of air fryers in its latest financial year and reported more than 20% growth in cosmetics and beauty sales as lockdowns and mask wearing ended.
It released its financial results for the year to end-August showing normalised adjusted headline earnings per share (Heps) of 11.9%.
This figure takes into account the KwaZulu-Natal riots, lost stock and insurance payments in different financial periods.
Clicks’s annual results give an insight into consumer buying behaviour.
It reported a slight increase in market share of small electrical appliances to 18.6% from 17.2%. This shows increased pressure on competitor Massmart’s Game stores.
CEO Bertina Engelbrecht said Clicks sold 42,000 air fryers, up from 18,000 in the prior period as consumers looked to save power and cope with load-shedding — she even bought one herself. Air fryers take less time to cook food than a conventional oven. The latest cooking trend is also one of Naspers-owned Takealot’s biggest sellers.
For the first time in three years, as normal life resumed, Clicks saw a return of the cold and flu season, which had disappeared during the Covid-19 pandemic and led to a sharp decline in sales of sinus and cough medicines. The sale of sport supplements was up more than 16%, as consumers headed back to gyms.
It is selling even more goods on three-for-two promotions, accounting for just more than 42% of all retails sales as constrained consumers hunt for bargains.
Clicks was the second retailer this week to report growing operational expenses due to increased load-shedding, and higher security and insurance costs in the wake of the riots in KwaZulu-Natal. Pick n Pay also highlighted the spike in insurance premiums and the added cost of diesel to power store generators.
Clicks said it was confident in its growth as it raised its long-term target for new stores and pharmacies by a third to 40-50 new stores and the same number of pharmacies annually.
The company, valued at R71.3bn on the JSE, is confident of reaching its new target of 1,200 stores.
It says already just more than half of all South Africans live within a 5km radius of one of its pharmacies.
The group generated cash inflows from operations of R4.3bn and the return on equity increased from 38.2% to 48%. During the year R1.7bn was returned to shareholders by way of dividend payments and share buybacks.
The retailer raised its final dividend for the year 31.5% to 457c, bringing the total for the year to 637c.
Group turnover increased 6% to R39.6bn and retail turnover 11.7% to R29.4bn.
Its distribution and wholesale division UPD, which sells medicine to pharmacies and hospital groups, saw total turnover increase 7.6% to R30.6bn. But wholesale turnover fell 5.2%, due mainly to lower sales to private hospitals after the Covid-19 pandemic as they needed less expensive medicines.
Clicks has installed solar panels on all eight of its Clicks and UPD distribution centres in the country.
Speaking on the outlook for the 2023 financial year, Engelbrecht said trading conditions will remain extremely constrained.
The share price gained the most in about 18 months, up 5.37% to R292.12.
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