COMPANIES
New Clicks dives on earnings warning
Posted Thu, 07 Apr 2005
Shares in health and beauty retailer New Clicks dived as much as seven percent on Wednesday after the group warned that its interim earnings would be up to 17 percent lower, due mainly to uncertainty over medicine pricing and a poor performance from its Clicks brand.
The retailer warned that diluted headline earnings per share for the six months to February 28 would be between 14 and 19 percent lower.
"While the turnover of the group's retail trading brands has been in line with the levels indicated in the trading update issued on 17 January 2005, the operating profit of the Clicks brand in the first half of the year has been disappointing," the group said in a trading update.
It attributed this to various factors, including shrinkage in inventory; deflation in selling prices, and marketing and IT costs.
In addition, pharmacy operations incurred a pre-tax loss of R39-million, in part due to the low margin allowed in terms of the medicine pricing
regulations, New Clicks said.
Performances from the group's other retail trading brands exceeded expectations.
Shares ended 5.99 percent lower at eight rand
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