Investment case

Clicks Group presents a compelling opportunity for equity investors seeking sustainable, long-term growth with non-cyclical exposure to South Africa’s retail and healthcare sectors.

This investment case should be read together with the group strategy report which outlines the group’s strategic objectives and drivers of longer-term growth.

Market leadership
Businesses occupy leading positions in health and beauty markets
  • Clicks is the largest retail pharmacy chain in South Africa, supported by a sizeable network of primary care clinics
  • UPD is the country’s leading national full-range pharmaceutical wholesaler
Healthcare markets defensive and growing
Over 80% of group turnover is in defensive merchandise categories
  • Improving living standards, increasing urbanisation and longer life expectancy is contributing to a growing market for health and beauty products
  • Well positioned to offer an affordable and accessible self-funding alternative to public healthcare
Value offering
Clicks is price competitive with all national retailers
  • Promotional sales account for 47.0% of turnover
  • Over R855 million returned to ClubCard members in cashback rewards
Accessible and expanding pharmacy network

  • Currently 53.2% of the population live within five kilometres of a Clicks pharmacy
  • Targeting to open 40 – 50 pharmacies each year
  • Retail pharmacy market share goal of 30% in the long term (2025: 24.0%)

 

* Includes 1 UniCare store.
Convenient and growing retail footprint

 

  • Targeting to open 40 – 50 new Clicks stores annually
  • 77% of stores located in convenience and neighbourhood shopping centres
  • Expanding into areas serving lower to middle-income customers, with stores in these communities now accounting for 23.7% of retail sales
  • Retail offering complemented by Sorbet beauty salon franchise chain and equity investment in premium beauty brand retailer, ARC stores

 

* Includes 1 UniCare store.

Differentiated product offer
Private label and exclusive brands offer differentiated ranges with higher margins

 

  • Target to grow private label to 31% of front shop retail sales; currently 25.9% of total sales and 30.6% of front shop sales
  • Clicks offers differentiated products through exclusive health and beauty brands such as The Body Shop and Sorbet

Growing loyalty and personalisation
ClubCard is one of the largest retail loyalty programmes in South Africa
  • 12.6 million active ClubCard members account for 82.6% of total Retail sales
  • Strong relationships with rewards partners, including ARC stores, City Lodge, eBucks, Engen, Europcar, Momentum Multiply, Spec-Savers and Vitality

 

Robust supply chain
Centralised supply from company-owned distribution centres to all retail stores
  • UPD provides an efficient healthcare supply chain channel for Clicks
  • UPD also offers wholesale and distribution services to pharmaceutical manufacturers

 

Sustainable business practices
Commitment to sound environmental, social and governance (ESG) practices
  • ESG practices aligned with nine selected United Nations Sustainable Development Goals
  • Multi-year inclusion in the FTSE4Good Index recognises the quality of the group’s ESG practices
  • R7.4 million invested in alternative energy and solar storage
  • R903 million for 2025 invested in training and development over past five years
  • Experienced, diverse, transformed and balanced board and executive leadership team

 

Globally competitive trading margins
Clicks and UPD trading margins rank in the upper quartile of global drugstores and pharmaceutical wholesalers

Efficient cash and capital management
Highly cash-generative business with industry-leading returns
  • R21.8 billion cash generated from operating activities before dividends paid over past five years
  • R11.4 billion returned to shareholders in dividends and share buybacks in past five years
  • R4.3 billion capital expenditure in past five years
  • Return on equity (ROE) of 49.2% far exceeds the average ROE of the other listed food and drug retailers in South Africa

 

Compelling organic growth prospects
  • Aim to operate a pharmacy in every Clicks store in South Africa
  • Accelerate the pace of new store and pharmacy openings
  • Develop and roll out the new UniCare specialised pharmacy format
  • Expand the baby store-in-store presence in Clicks
  • Extend the group’s presence in southern Africa and evaluate opportunities in new markets