Clicks Group (CLS) H2 2024 earnings summary

Executive summary

• Diluted headline EPS increased 14.3% year-over-year to 1,193.5 cents, reflecting strong operational resilience and in line with market expectations.

• Group turnover rose 9.2% to R45.4 billion, with retail turnover up 11.7% and comparable store turnover up 8.4%.

• Store and pharmacy network expanded to 936 stores and 720 pharmacies, with 51 new stores opened and pharmacy licensing issues resolved.

• Market share gains achieved in all core health and beauty categories; ClubCard active members reached 11.8 million, contributing over 81% of sales.

• Continued focus on sustainability, gender diversity, and community healthcare initiatives, with significant investment in renewable energy and black-owned businesses.

Financial highlights

• Group trading margin rose 50 bps to 9.2%, driven by retail growth and cost control; retail trading margin at 10.2%, UPD/distribution margin at 3.2%.

• Operating profit grew 15.1% to R4.2 billion; gross profit up 14.2% to R10.6 billion.

• Return on equity improved to 46.4% from 43.6%; ROIC (excl. IFRS 16) at 45.6%.

• Dividend per share increased 14.3% to 776 cents, with a 65% payout ratio; R2.5 billion returned to shareholders via dividends and buybacks.

• Cash generated by operations totaled R6.0 billion; year-end cash resources at R2.7 billion.

Outlook and guidance

• Consumer environment expected to improve with lower inflation, stronger currency, and reduced electricity outages.

• Medium-term target of 1,200 stores; plan to open 40–50 new stores and pharmacies annually.

• CapEx of R1–1.1 billion per annum planned for next three years, focused on network expansion, IT, and infrastructure.

• Retail trading margin guidance raised to 10–11%, group margin to 9–10%; confident in sustaining growth and delivering on medium-term targets.

• UPD positioned to regain wholesale market share after improved H2 performance.