Clicks reports solid FY earnings, outlines plans to increase online presence

Clicks, the South African health and beauty retailer, has reported a significant increase in full-year earnings, with a final dividend of 450 cents per share. The company, deemed an essential service during the lockdown, managed to keep its stores open, contributing to its solid financial performance. CEO Vikesh Ramsunder revealed that Clicks plans to leverage its reach and distribution network to sell a COVID-19 vaccine once it becomes available. However, Ramsunder clarified that the company is not currently in talks with any vaccine candidates in the final stages of production. He mentioned that any vaccine would have to be approved by the South African Health Products Regulatory Authority (SAPRA), and Clicks' pharmaceutical arm, UPD, would play a crucial role in securing and distributing the product. When asked about how Clicks would select which vaccine to sell, Ramsunder stated that it is too early to make such decisions, and the company would follow its normal procedures, engage with suppliers, and coordinate with the government. While global leaders are optimistic about the imminent availability of a vaccine, Ramsunder emphasized the need for caution and stated that there is no clear timeline for a vaccine's release. The conversation then shifted to the aftermath of a racist advertisement by TRESemmé that led to protests and damage at Clicks stores. Ramsunder mentioned that the company is working with insurers to assess the total cost of damages and stated that charges have been filed against the Economic Freedom Fighters (EFF) party for the incident. Clicks is supporting the legal process and providing necessary information as required. Regarding the commercial relationship with TRESemmé, Ramsunder noted that Clicks continues to engage in discussions with the brand and emphasized that specific criteria must be met before TRESemmé products are reinstated on Clicks' shelves. On the topic of online growth, Ramsunder highlighted Clicks' significant investments in its online business, including the launch of a website and app. He outlined plans to expand revenues in the online space to around 10% in the next five years. However, Ramsunder acknowledged the need to enhance the logistics and supply chain for better customer experience. While Clicks primarily operates as a brick-and-mortar retailer, the company views online expansion as a defensive strategy to provide customers with choices. With challenging economic conditions looming due to the ongoing COVID-19 pandemic, Ramsunder reaffirmed Clicks' commitment to its strategic goals. The company will focus on opening more stores, enhancing value for consumers, expanding private label offerings, and leveraging the Clicks club card loyalty program. Ramsunder expressed confidence in Clicks' growth opportunities in the South African market, despite the tough operating environment. He stressed the importance of providing meaningful and personalized offers to customers to drive continued value and loyalty. As South Africa's leading health and beauty retailer, Clicks remains dedicated to delivering value to shareholders and maintaining its position in the market.