Clicks diluted HEPS up 18.1% to 249.7c

A final distribution of 88.0 cents per share was declared, resulting in a total distribution of 125.0 cents for the year - an increase of 17.7% over the previous year.

The I-Net Bridge consensus forecast was for diluted HEPS of 250.7 cents and a total dividend of 126.0 cents per share.

The group's retail turnover increased by 10.9% to R10.8 billion, while its oprating margin improved by 40 basis points to 6.6%, resulting in a 13.9% increase in operating profit for the period.

"Trading conditions became increasingly challenging during the year. We also encountered the high base set in 2010 which included the FIFA World Cup. Selling price inflation averaged only 1.6% for the year, compared to 5.4% in the previous year, which reduced turnover growth by almost four percentage points," chief executive, David Kneale, said.

Headline earnings increased by 13.9% to R655 million. Cash inflow from operations increased by R244 million over 2010 to R677 million, with R226 million used for capital expenditure and R848 million returned to shareholders through share buy-backs and distributions.

Inventory days in stock moved from 55 to 60 days and inventory levels were

14.7% higher at year-end, mainly as a result of stock levels in the group's pharmaceutical wholesaler UPD returning to normalised levels.

UPD increased turnover by 4.2% as price inflation in the wholesale business declined to 3.3%.

"The performance of UPD was negatively impacted by the absence of an increase in the single exit price (SEP) of medicines by the Department of Health for 2011," Clicks said.

The Clicks chain posted real sales growth of 12.0% and continued to grow its share of the increasingly competitive healthcare market.

Clicks opened its 400th store in August 2011 as 31 new outlets were added during the period, the highest number in a single year.

The national pharmacy footprint was extended to 283 with the opening of a further 32 dispensaries. The Clicks operating margin improved from 6.9% to 7.7%, and operating profit increased by 25.8%.

The group's Musica division saw performance slow in the second half and turnover for the year was 5.9% lower as the decline in the CD and DVD markets accelerated.

The Body Shop's operating profit increased by 3.5% despite the brand experiencing price deflation of 6.6%.

Return on shareholders' equity (ROE) increased from 50.8% to 62.2% for the year, boosted by share buy-backs of approximately R300 million in the last six weeks of the financial year.

Looking ahead, the group said consumer spending was expected to remain muted in the current uncertain economic climate.

"The group will face increasing cost pressures in employment, property, transport and utilities. The focus for the year ahead will therefore be on driving volume and containing costs," it said.

Capital expenditure of R257 million has been committed for 2012 and trading space is planned to increase by 4% to 5%.