Our opinion on the current state of CLS

Clicks (CLS) describes itself as a retail-led healthcare group. It incorporates Clicks, GNC and The Body Shop. Clicks has 782 stores of which 585 include pharmacies - which makes Clicks the largest pharmacy chain in Southern Africa. Although more retail outlets are installing pharmacies in their shops, the listed Dischem is Clicks main competitor. Probably the only negative about this company was its involvement with the fifty-nine stores of Musica, which it has now closed. On 10th May 2021 the company announced that it had acquired the pharmacy business of Pick n Pay - which consists of twenty-five pharmacies located inside Pick 'n Pay stores. These will now be re-branded to Clicks stores. Technically, the share has been a steady performer over the past 20 years. Its share price has risen by more than 2500% since it listed - which compares very well with the JSE's average over the same period. We regard this as one of the best blue-chip shares trading on the JSE. It has proven that it is more-or-less recession-proof and continues to perform remarkably well. In its results for the year to 31st August 2023 the company reported group turnover up 8,2% and headline earnings per share (HEPS) up 11,5%. The company said, "Strong growth in private label sales and the sustained recovery in the beauty category were supported by the Clicks ClubCard loyalty programme which has grown to 10.4 million active members". As a result of its high rating, the share trades on a P:E of 25,33 - but we believe that it remains an excellent medium-term investment which should find a place in every private investor's portfolio. It is what we refer to as a "diagonal" share because over the past 15 years its chart goes from the bottom left-hand corner of your screen to the top right-hand corner. The share price has come off somewhat since May 2022 and could be at or close to a good buying point.