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Key Points
- The Royal Bank of Canada acquires an additional stake in Clicks Group, increasing its total beneficial interest to 5.001%.
- Clicks Group's gross profit rose 10.5% to R9.31 billion ($493.3 million) in 2023, driven by over 900 stores and expanding digital sales.
- Despite RBC's acquisition, Clicks shares fell 0.59% to R373.15 ($21.12), reflecting market volatility and contrasting moves with JP Morgan.
The Royal Bank of Canada (RBC), the largest bank in Canada by market capitalization, has announced the acquisition of an additional stake in Clicks Group, a leading health, beauty, and wellness retailer led by South African executive Bertina Engelbrecht.
This strategic move, executed through its subsidiary RBC Global Asset Management Inc., reflects the Canadian multinational's confidence in Clicks' financial robustness and its potential for growth, enhancing RBC’s total beneficial interest in Clicks to 5.001 percent.
Clicks expands with over 900 stores
Under the leadership of Bertina Engelbrecht, CEO and executive director, Clicks has established itself as a leader in the healthcare market, boasting an extensive network of over 900 stores and 715 pharmacies, alongside a growing digital footprint.
Engelbrecht's tenure has been marked by significant financial achievements, with Clicks reporting a 10.5 percent increase in gross profit to R9.31 billion ($493.3 million) for the year ending in 2023, up from R8.43 billion ($446.62 million) in 2022.
The retailer also saw total income rise by 7.6 percent to R12.16 billion ($643.93 million), compared to R11.3 billion ($598.34 million) the previous year. Total assets increased by 6.6 percent, reaching R19.03 billion ($1.01 billion) from R17.86 billion ($945.94 million) in 2022.
Clicks shares dip despite RBC investment
Despite RBC's bullish investment, Clicks shares experienced a marginal decline of 59 basis points during today's trading session on the Johannesburg Stock Exchange (JSE).
The stock opened at R375.35 ($21.24) but slipped to R373.15 ($21.12) by mid-day, reflecting the ongoing volatility in the market. Currently, Clicks' market capitalization stands at R88.86 billion ($5.03 billion), with RBC's stake valued at R4.44 billion ($251.4 million).
The acquisition comes on the heels of a retreat by JP Morgan Chase & Co., one of the world's largest financial institutions, which reduced its beneficial interest in Clicks from 10.19 percent to 7.51 percent.
The contrasting moves of RBC and JP Morgan highlight changing dynamics in the retail sector as investors reassess their positions amid fluctuating market conditions.
