NEWS ANALYSIS: Clicks stays the course under Bertina Engelbrecht

When Bertina Engelbrecht took over as CEO at Clicks in January 2022, she inherited one of the strongest businesses on the JSE, a market-leading health and beauty retailer with a long record of earnings growth, strong cash generation and a clear strategy already in place.

More than three years into her tenure, Clicks has largely remained on that path. Engelbrecht’s leadership has been defined by steady execution, operational discipline and continuity.

Clicks’ share price has risen about 18% since Engelbrecht became CEO, reflecting confidence in the group’s business model.

However, the stock has struggled more recently, falling just more than 10% in the past year. The group’s market value has hovered at about R75bn since 2021.

Despite the recent pullback, fund managers continue to view Clicks as a quality, defensive stock. MP9 Asset Management CIO Aheesh Singh describes the group as a story of consistent leadership rather than dramatic change.

“The handover was well managed; the strategy has stayed largely intact. For investors, it remains a quality counter on the JSE, where the real debate is about the sustainability of that mid-teens compounding in a tough consumer backdrop,” Singh said.

Engelbrecht stepped into the CEO role following the departure of Vikesh Ramsunder. At the end of the 2021 financial year, Clicks had just emerged from a turbulent period. The group delivered resilient operational performance despite Covid-19 disruptions and severe civil unrest in KwaZulu-Natal that damaged stores, distribution centres and inventory.

Yet, Clicks remained profitable and cash-strong. The group reported modest earnings growth on a reported basis, with stronger underlying growth once the impact of the unrest was stripped out. Dividends continued to be paid, and the balance sheet remained healthy after significant shareholder returns.

Operationally, the business was well established. Clicks operated hundreds of stores and pharmacies across South Africa, supported by UPD, the country’s leading pharmaceutical wholesaler. Its integrated model — retail, pharmacy and distribution — was already a core differentiator.

Execution and scaling

Strategically, the focus was on value pricing, convenience, store and pharmacy expansion, private label growth and disciplined cost control. Large-scale investment in IT and supply-chain systems had begun, but several projects were still at early stages.

Engelbrecht, an internal appointment with more than 15 years at the group, did not reset the strategy. Instead, she focused on execution and scaling what was already working.

By the 2025 financial year, Clicks had grown into a larger operation with almost 1,000 stores, a materially expanded pharmacy network and a more advanced digital and supply-chain backbone.

Earnings continued to grow at a double-digit pace, dividends increased in line with profits and return on equity remained among the highest in listed retail.

Cash generation strengthened, allowing the group to fund nearly R1bn a year in capital projects while still returning significant amounts to shareholders through dividends and share buy-backs.

One of the defining features of Engelbrecht’s tenure has been sustained investment. Clicks has consistently reinvested in the business, even as consumer conditions tightened.

Capital expenditure has focused on three areas: expanding the store and pharmacy base, upgrading IT systems, and strengthening the supply chain. Major systems projects have included new retail merchandising platforms, warehouse management systems and pharmacy management software.

These investments are aimed at improving stock availability, reducing shrinkage, optimising pricing and promotions, and supporting long-term efficiency. In distribution, UPD has upgraded systems, expanded facilities and invested in solar energy and electric delivery vehicles to reduce operating costs and improve reliability.

The group has also continued to invest in its store formats, including convenience-focused locations, lower-income areas and specialised formats such as UniCare 24-hour pharmacies.

Though successful, Clicks has not been without challenges during Engelbrecht’s tenure. The group has had to navigate lingering Covid-related disruptions, supply-chain volatility, rising input costs and weak consumer spending.

Cost pressures have been persistent, particularly in wages, utilities, security and logistics. While investments in solar energy and efficiency have helped, margins have required active management.

Inventory management has also been a recurring focus, especially within UPD, where demand fluctuations in hospital channels and pharmaceutical products have affected stock levels at different points.

Leverage and scale

The group has had to manage regulatory dependencies, particularly about pharmacy licensing and healthcare policy, while maintaining strong relationships with government and healthcare funders.

The core strategy has remained consistent in 2021-25. Then, as it does now, Clicks positioned itself as a value-focused, convenience-led retailer in defensive categories, supported by private label growth and a large loyalty base.

What has changed is the emphasis. While the earlier period focused on recovery and stabilisation, the current phase is about leverage and scale. Investments made over the past few years are now being used to drive efficiency, protect margins and support growth in a lower-inflation, slower-spending environment.

Private label has become an increasingly important differentiator, contributing a growing share of front-shop sales. Loyalty, through ClubCard, has deepened customer engagement and provided valuable data to personalise offers and pricing.

Healthcare has also become more central to the growth story, with expanded pharmacy services, primary care clinics and digital healthcare offerings reinforcing the group’s defensive positioning.

For the 2026 financial year, Clicks has signalled another step up in investment with planned capital expenditure of more than R1.2bn set to fund further store and pharmacy openings, continued system rollouts and additional supply-chain and energy projects.

The group expects retail trading space to expand by about 5%, moving closer to its medium-term target of 1,200 stores.