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Integrated Annual Report 2016

Integrated
Annual Report 2016

Additional reporting

The Integrated Report is the group’s primary reporting medium and this is supplemented by the following additional reports and information:



Forward-looking statements

The Integrated Report includes forward-looking statements which relate to the possible future financial position and results of the group’s operations. These statements by their nature involve risk and uncertainty as they relate to events and depend on circumstances that may or may not occur in the future.


The group does not undertake to update or revise any of these forward-looking statements publicly, whether to reflect new information or future events or otherwise. The forward-looking statements have not been reviewed or reported on by the group’s external auditor.




Review of 2016

Good trading performance as Clicks gains market share

UPD maintains margin in difficult year

Operating profit up 12.6% to R1.6 billion

Diluted HEPS up 14.2% to 438.5 cps

Total shareholder return of 35.3%

1 200 new jobs created

R32.6 billion

shareholder value created in 20 years of JSE listing

Outlook for 2017

Consumer environment to remain challenging

Continued organic growth prospects for Clicks into the longer term

Record capital expenditure of R577 million to support growth

Directors and management confident of sustaining performance and delivering on medium-term targets

Medium-term targets

2016 – 2018 targets Performance in 2016 2017 – 2019 targets
Return on equity (%) 50 – 60 49.2 50 – 60
Return on assets (%) 14 – 18 13.8 14 – 18
Inventory days 55 – 60 66 60 – 65
Operating margin (%)
  • Group
6.0 – 7.0 6.5 6.0 – 7.0
  • Retail
7.0 – 8.0 7.8 7.5 – 8.5
  • Distribution
2.0 – 2.5 2.5 2.0 – 2.5

Group Profile

Clicks Group is a retail-led healthcare group listed in the Food and Drug Retailers sector on the JSE.

Founded in 1968, the group has been listed on the JSE since 1996. Following changes in South African legislation in 2003 to allow corporate pharmacy ownership, the group entered the retail pharmacy market with the opening of the first Clicks pharmacy in 2004.

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Pie Charts

Clicks Group aims to create sustainable long-term shareholder value through a retail-led health, beauty and wellness business model.

Leadership

Chairman

Chairman's report


"The group has once again shown its resilience in the face of growing economic headwinds and produced another strong performance."



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Chief Executive

Chief executive's report


"The group has made excellent progress in delivering on its strategy of creating sustainable long-term shareholder value through a retail-led health, beauty and wellness offering."


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Chief Financial

Chief financial officer's report

"Clicks Group continued to deliver highly competitive returns to shareholders against the backdrop of a deteriorating economic environment, with the business generating strong organic revenue growth and cash flows while investing record levels of capital to fund longer-term growth."

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Operational Performance

Clicks Logo

"Clicks ClubCard attracted over one million new members in 2016, bringing total active membership to 6.2 million customers."

UPD Logo

"Despite multiple challenges UPD maintained its operating margin at 2.5% by driving efficiencies and through good cost management."

Governance

Notice of annual general meeting 2016

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