R2.8 BILLION VALUE CREATED FOR CLICKS GROUP EMPLOYEES
THROUGH EMPLOYEE SHARE OWNERSHIP PROGRAMME
R100 million donated to New Clicks Foundation to fund pharmacy bursaries
Cape Town – Over 7 800 of Clicks Group employees will share in a R1.5 billion payment that has been created through the Group’s employee share ownership scheme (ESOP). This is in addition to the R1.3 billion already paid out under the scheme to beneficiaries in 2018.
Vikesh Ramsunder, CEO of Clicks Group, says that this is the final payment of the remaining 50% of shares in the scheme. “Participants have also received dividends totalling R39 million over the course of the scheme, which is testimony to the consistent growth of the share price, the loyal support from our customers and the hard work and dedication of everyone across the business.”
The Clicks share price has appreciated by over 360% since the scheme’s commencement in 2011.
In June 2018 Clicks joined the JSE’s top 40, and in November was recognised by the Sunday Times Top 100 Companies Awards as one of the top three performing shares on the JSE over the past 5 years.
The scheme has empowered over 5 800 current and 2 000 former employees to become shareholders in Clicks Group, with the majority of these beneficiaries owning shares for the very first time, he says.
86% of the beneficiaries of the scheme are black employees and 65% female.
The employee share scheme was introduced in support of the Group’s transformation agenda, with the objectives to drive employee affiliation and retention of critical talent and to enable employees to share in the growth and success of the business.
Ramsunder explains that 10% of the Group’s issued shares at the time were placed in the Employee Share Ownership Trust to be allocated to all full-time permanent employees. “Senior black employees, longer serving employees and pharmacists received a higher share allocation.”
In February 2018, R1.3 billion was paid to 7 839 beneficiaries, representing the gain on the first 50% of the shares allocated under the ESOP. The Group’s CFO and Trustee on the ESOP Board, Michael Fleming, reported that, “The remaining 50% of the shares allocated to beneficiaries were sold by means of an accelerated bookbuild on 6 February 2019 which was well supported by both international and local investors. The value of the 2018 and 2019 payouts will bring the average payout per beneficiary of the scheme to R355,000.”
By delivering on its objectives to attract and retain scarce and specialist skills and to accelerate the Group’s transformation agenda, the ESOP has contributed to the growth of the Group, creating employment opportunities at a time when the market has been shedding jobs, and enabled employees to share in the wealth generated in the Company.
At the commencement of the scheme, Clicks had 350 stores and 250 pharmacies. Eight years later, the Clicks chain has grown to over 675 stores and 525 pharmacies with plans to extend the footprint to over 900 stores.
Clicks employees have been extremely appreciative of the opportunity to participate in the ESOP, says Group Human Resources Director, Bertina Engelbrecht. “We are inspired by the messages and letters from beneficiaries expressing their appreciation to the Company and our shareholders for changing their lives. Many have invested their ESOP payouts in order to provide for their children’s or their grandchildren’s education”.
Engelbrecht says that the share ownership scheme was introduced to attract and retain scarce and critical skills, as well as enable employees to participate in the financial success of the company. “Extending equity ownership to employees has also enabled the Group to accelerate transformation and build on the progress that we have made across all the other areas of BBBEE. The Clicks Group has been consistently rated as a top empowered retailer and a top gender empowered company,” she says.
The employee share scheme is only one of the ways that the Group invests in its employees and demonstrates its commitment to social development. Engelbrecht says that in the past year Clicks invested R125 million in learning and skills development. This included on-the-job training, skills programmes, learnership programmes, short courses and academic qualifications. “As the largest employer of pharmacy staff in the private sector in South Africa with over 2,000 pharmacy and clinic professionals, the Group continues to play a leading role in providing opportunities and developing scarce healthcare skills through learnership and graduate development programmes.”
“Since 2012 the Group has funded bursaries for 474 pharmacy students and provided internships for 337 pharmacy graduates. The Group’s in-house Pharmacy Healthcare Academy trains over 350 pharmacy assistants each year,” she says.
This bursary programme has been accelerated with a R100 million donation to the New Clicks Foundation to support students in further education. The Foundation has already awarded 100 bursaries to Pharmacy students in 2019.
“We believe that these young South Africans will become leaders who will take the industry in South Africa forward and will contribute to delivering quality healthcare to all South Africans,” concludes Engelbrecht.