Clicks vs Dis-Chem: Battle of pharmacy giants
With Dis-Chem’s listing in 2016, investors have a tough call to make between the rivals in the health and beauty sector
Reliably consistent growth in good and bad times, high returns and strong cash flow are usually the three essential attributes sought by long-term investors. Clicks Group has been delivering them to its shareholders for over a decade. "Clicks just keeps on powering ahead," says Nadim Mohamed of First Avenue Investment Management. "Its management have done a superb job." Clicks, which celebrates its 50th anniversary this year, kept up the pace in its half-year to February, turning in a 12.2% rise in operating profit to R942m, a 14.8% rise in headline EPS (HEPS) and a 16.5% rise in its interim dividend. Adding to the solid showing was an impressive 39.3% return on equity and cash flow after tax of R890m. As always, health and beauty products were the big drivers of Clicks’s growth in its past half-year. Here Clicks excelled, lifting sales by 14.3% to an estimated R9.5bn. "We achieved the health and beauty sales growth despite internal inflation of only 2.6%," says David Kneale, Clicks...
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