The unrest in KwaZulu-Natal in July has had a big impact on Clicks, with the company downgrading its expected annual profit growth from 8% to 13% – to basically zero.
Some 6% of the company’s stores – 52 Clicks stores and one The Body Shop store – were looted and vandalised in the province. Eleven stores are still closed. Nine should be opened in this financial year, while the final two damaged stores will be opened in the 2023 financial year.
The UPD and Clicks distribution centres in KwaZulu-Natal were both looted and damaged, but have been reopened.
Additional costs were incurred for private security services to protect the distribution centres as well as air transportation costs to supply medicines from Johannesburg to KwaZulu-Natal.
Clicks has submitted a R726-million claim to Sasria – including R522 million for loss of stock and R182-million for the replacement of fixed assets.
The group has already received R217 million from Sasria, which will be accounted for in the 2021 financial year, which ended in August. The remaining amount will be recognised in the following year.
In April, Clicks expected an increase of 8% to 13% in diluted headline profit for the year to August.
But due to the impact of the civil unrest, and the fact that only 30% of the total Sasria insurance claim has been accounted, the group now expects its profit for the year ended 31 August 2021 to increase by 0% to 3%. Without the impact of the civil unrest, profit would have been in line with the previous 8% to 13% range, Clicks said.
Group turnover from continuing operations – Musica was closed in the past year – increased by 10.2% (compared to growth of 10.5% in 2020).
Sales at Clicks as well as Body Shop, GNC and Claire’s increased by 8.3% (8.4% in 2020) over the past year. Its pharmaceutical distributor UPD increased its turnover by 12.3% (2020: 11.2%) over the prior year.
“Sales in the last seven weeks of the financial year were significantly impacted by the civil unrest in KZN. In addition to the store closures due to damages and the temporary store closures at the peak of the violence, trading in the affected areas remains well below the levels of the previous year and this is expected to continue in the short term,” Clicks warned.
Clicks has now administered almost 600 000 vaccinations at 300 sites, and plans to open a further 268 sites in the coming weeks.
By Penelope Mashego for News24
Bidvest said the demand for its products and services began normalising towards the tail end of the reporting period.
Industrial giant Bidvest has reported its highest-ever trading profit in its automotive, branded products, commercial products and services divisions.
The group, which on Monday released its results for the year ended 30 June 2021, said its trading profit grew by 48% to R7.9 billion and its operations generated R13.6 billion in cash.
Its normalised headline earnings per share from continuing operations rose by almost 26% to 292c. Bidvest declared a total dividend of 600 cents.
The company’s services division provides solutions such as security, facility management and aviation services. Its automotive division is made up of retail, vehicle assistance and vehicle and online auctioneering. It also offers commercial products include protective clothing and equipment, plumbing and bathroom products as well as branded products for office use, niche packaging and pharmaceuticals, through its subsidiary Adcock Ingram.
Bidvest said the demand for its products and services began normalising towards the tail end of the reporting period, exceeding expectations in many instances. The performance of its commercial products was aided by the division’s market share gains, improved factory recoveries and expense management.
In its automotive division, Bidvest said its focus on margins and not volume, as well as improving its efficiency and managing tis expenses, resulted in profit growth, despite a decrease in vehicle demand.
“Branded Products’ result, which includes (pharmaceutical group) Adcock, was good considering the significant demand disruption caused by the hybrid way of working and learning, and no flu season,” said Bidvest.
The company said good investment returns had played a role in the “reasonable” performance of its financial services business. Its UK and Spain hygiene services provider, PHS, performed beyond expectations, while in South Africa the services business also reported good results, despite the impact of the Covid-19 lockdown, such as travel bans.
Bidvest CEO Mpumi Madisa said: “These pleasing financial results reflect the success in achieving our planned strategic objectives, increased market share and organic growth in key sectors. It also follows the successful conclusion of the disposal of non-core assets, which started after the unbundling of the foodservices businesses, and has resulted in cumulative proceeds of more than R4 billion since FY 2017.”
South African insurer Discovery said on Monday its full-year profits could fall by up to 90%, hit by a 3.3-billion rand ($191-million) provision to cover the potential impact on claims and policy lapses due to the coronavirus.
It also said it would not pay an annual dividend, with the payouts to be considered when appropriate, sending its shares down 5.5% before recouping some losses.
The company said the hefty provision covered the potential impact on claims and anticipated policy lapses as stretched customers stop paying, while the outlook also covered the impact of long-term interest rates.
It warned its headline earnings per share – the main profit measure in South Africa – for the year to June 30 were expected to be between 70% and 90% lower than the 789 cents reported a year earlier, though it said the final outcome was subject to a high degree of volatility.
“Discovery is confident that the group is strong under high stress scenarios, with sufficient liquidity and solvency to weather uncertain conditions,” it said, adding capital ratios and cash buffers were expected to remain within or above target.
The provision, Discovery said, was intended so that all of the currently expected impact of the novel coronavirus as far ahead as 2022 was carried in this financial year.
Changes to interest rates in South Africa after the government lost its final investment-grade credit rating earlier this year, and historically low interest rates in the United Kingdom where it has a unit, were expected to have a further substantial impact on performance.
Discovery’s profits have been falling in recent years as it ploughed money back into new businesses including a hefty investment in launching a digital bank, which it said now has 177,000 clients and 2.1 billion rand in retail deposits.
So far, lapses in most of its businesses had been low, it said, while new business annualised premium income was up 4% for the 11 months to May 31.
Bidvest on Monday reported a better set of first-half results, leveraging off the diverse nature of its portfolio.
Easily one of the better proxies of the local economy, its portfolio spans services, freight, automotive, office and print, commercial products, financial services and electrical companies.
Trading profit rose 12% to R3.1bn in the six months to end-December, as revenue rose 10.7% to R39.9bn.
The services, freight, and office and print divisions were the standout performers, with increases in trading profit of 24.3%, 18% and 12.7%, respectively. The automotive division disappointed though, with trading profit down 6%.
Bidvest SA also counted on the acquisition of facility management services group Noonan, as well as the additional three-month contribution from Brandcorp.
The share of profits from associated companies, before capital items, was up 26.4%.
Bidvest holds investments in pharmaceuticals group Adcock Ingram (38.5%), airline operator Comair (27.2%), Mumbai Airport (6.75) and a 52% interest in Bidvest Namibia.
But trading profit in Bidvest Namibia slumped 68% as a result of what the group said was sluggish economic growth
in that market, and fishing industry and operational challenges.
All in all, group headline earnings per share (HEPS) rose 12.5% to R5.74 and interim dividend per share 12.3% to R2.55.
By Andries Mahlangu for Business Day
Unlisted retail group Edcon reported on Tuesday that its net profit improved by 3.8% to R2bn, although sales declined in the September quarter from the matching period in 2016.
Edcon said its overall retail sales suffered from “fierce price competition through ongoing promotions by competitors” and its decision to close unprofitable stores.
In its flagship Edgars clothing chain, sales declined 0.9% to R2.46bn during the three months to September 23. Sister clothing chain Jet’s retail sales declined 1% to R2.28bn.
Edcon’s “speciality” division, which houses news agency CNA and Edgars Shoe Gallery, reported a 41.5% decrease in sales to R463m because the comparative period included Legit, which was sold in January. Excluding Legit, the speciality division suffered an 11.4% decline in sales. CNA’s sales fell 12.1%.
“Our trading environment remains challenging as consumer demand is weak on the back of tight credit conditions, low growth in consumer disposable income, political uncertainty and restrictive fiscal policy,” Edcon CEO Bernie Brookes said.
“Despite this, it is pleasing that the group’s strategic transformation is delivering positive retail sales growth in certain merchandise categories, such as ladieswear in both Edgars and Jet, as well as cellular in Jet, while childrenswear, footwear, cosmetics and cellular within Edgars are also starting to show signs of change.”
By Robert Laing for Business Live
US dealer group Independent Stationers has announced positive growth in its sales and many of its member programmes for 2015.
“Probably every single magazine published in this country is wasting vast amounts of cash because of what’s known as ‘bad data’ – and we can stop that almost immediately,” says Chris Brewer of Brewer’s Advertising Data.