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Vikesh Ramsunder joined Clicks as a cashier and bows out as CEO

KATHARINE CHILD childk@businesslive.co.za

Clicks CEO Vikesh Ramsunder was at the group for 28 years. He started as a cashier and is leaving to head a health and beauty retailer in Australia. On Thursday, he presented the group’s annual results. Business Day spoke to him.

This is your last set of annual results before you leave for Australia. How do you feel?

I am heartbroken, honestly. You know, when you’ve been in a company more than 20 years — I’ve given my life to the business — it’s sad to leave both the company and the country.

The economy is constrained and consumers under pressure. Is there actually room for Clicks to keep growing?

Yes. Same-store growth was 5%. Price inflation was around 3%. There has also been volume growth of about 2%, which is excellent news in a market like this. At the same time, we’ve managed to contain cost growth at 4%. Don’t forget, excluded from [the results] is the impact of all the disruptions in the year.

So if you had to start adding back the hundreds of millions lost due to that, then growth would have been significantly higher.

Pick n Pay also said the civil unrest was incredibly costly. How bad was it?

In fact, it’s an incredible story because in a year, we closed down Musica, had disruptions in September [hair advert protest] and disruptions in July.

What else do you throw at the group? That just shows you how resilient the brand is, actually.

There is a push by some medical aids to get people to see nurses at pharmacies before going to a doctor for minor ailments. The use of telemedicine seems to be a focus competitors such as DisChem are investing in. Do people really want to go to a pharmacy nurse first? We haven’t expanded our 200 clinics as we haven’t seen a massive growth in the primary healthcare market. So certainly, [nurse consultations] will grow in time, as will virtual doctor consultations, which we also offer at our clinics. But it will be slow, so there’s just no need to splash out any more capital to accelerate that.

Clicks is now the largest private-sector SA Covid-19 vaccine provider with 525 sites and the ability to offer 600,000 shots a month. But low uptake means some businesses are planning to close down sites.

Will Clicks shut down empty vaccination sites?

Let’s first talk about the socioeconomic impact on all of us if we don’t vaccinate. We’ve actually taken the higher moral ground. We need to make it as easy and as convenient for the citizens of the country to vaccinate. Because if we don’t have high vaccination rates, this drag and this [economic] difficulty that we all feel will continue.

So I can’t complain on the one side that says the economy is tough and on the other side stop vaccination [in unprofitable sites]. That makes no logical sense. We will continue to support vaccination.

Clicks has long been described as an expensive share. The price-to-earnings ratio of 35 means it will take 35 years to recoup the cost of the

share using the annual headline earnings as a basis. This is high.

[It’s not expensive] for health and beauty, though. If you look at global market leaders, which we are among emerging economies, we are not that expensive. In all honesty, if you go back and look at our share price 10 years ago, it’s grown nearly six-fold

If you say the share is expensive, you will miss out on a quality stock that has significant opportunity for longterm growth. We were also expensive 10 years ago, but look at what investors have made. The shareholders who bought into us 10 years ago, when we were also seen as expensive,

have received a significant return on their investment.

You are optimistic about growth for Clicks in SA, but you are leaving the country. Is there a contradiction in your outlook and departure?

I think I’ve earned the right to change companies. [The offer good from Australia] career opportunity. really was I ’a ve spent 28 years in a company and developing my skills in an emerging market. I’ve now got an opportunity to test those skills [out] in a developed market. That’s really the attraction in the end, and I think it’s actually something anyone would want to do.

SHAREHOLDERS WHO

BOUGHT INTO US 10 YEARS AGO … HAVE

RECEIVED A

SIGNIFICANT RETURN

ON THEIR

INVESTMENT

OPINION

en-za

2021-10-22T07:00:00.0000000Z

2021-10-22T07:00:00.0000000Z

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