Clicks Group Limited

Group turnover increased 7.4% year over year. Retail turnover grew 5.4% and same-store sales rose 3.1%; UPD reported turnover increased 13%, with wholesale up 7% and preferred bulk distribution up 31.1%. Group trading profit increased 7.4% to ZAR 2.3 billion, trading margin was maintained at 9.1%, and diluted headline earnings per share increased 8.1% to ZAR 6.53. The interim dividend was increased 8.4% to ZAR 2.58 per share. The group generated ZAR 1.9 billion in cash from operations after working capital, returned ZAR 1.5 billion to shareholders through dividends, and completed ZAR 752 million of share buybacks. Looking ahead, management guided for full-year diluted HEPS growth of 4% to 9% and said full-year CapEx is planned at ZAR 1.3 billion, including ZAR 662 million for stores and pharmacies and ZAR 594 million for IT systems and infrastructure.

Bertina Engelbrecht said the first half was tough, with constrained consumer spending, intensified competition, and a short-term sales hit from the warehouse management system rollout in the Western Cape. She emphasized that the group kept investing in stores, pharmacies, clinics, technology, and sustainability, while ClubCard membership reached 12.9 million active members and UPD continued to improve through wholesale growth and disciplined expense control. Her tone was confident but realistic, repeatedly framing the business as resilient and adaptable in a changing competitive environment.

Gordon Traill highlighted that the group maintained a 9.1% trading margin despite promotional pressure and faster GLP-1 growth. He cited ZAR 1.9 billion of cash generated from operations after working capital, ZAR 3.2 billion of cash generation before lease, working capital and tax outflows, and ZAR 1.2 billion of closing cash; he also noted ZAR 311 million of CapEx in the half and ZAR 752 million of share buybacks. On the cost and margin side, retail costs rose 6.1%, UPD’s total income margin fell 50 basis points to 8.9%, and group total income margin was 30 basis points lower, but he said operating costs were overall well controlled.

Analysts focused on competition and loyalty programs, the WMS rollout in Durban after the Cape Town disruption, diesel and inflation assumptions, pharmacy licensing delays, and whether promotion intensity would rise in H2. Management said pharmacy market share gains, the planned on-demand OTC delivery trial, more pharmacies, and UniCare expansion support the competitive position, while the Durban WMS rollout should be smoother because Cape Town was the most complex DC and lessons have been absorbed. On margins and promotions, management said monthly ClubCard cashback is helping customer response, promotions will be used more selectively, and private label remains an offset; on licensing, they pointed to resource constraints at regulators but said they already hold many licenses for the rest of the year.