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NEW CLICKS HEALTHCARE STRATEGY
Company Name: New Clicks Holdings Limited
Share Code: NCL
ISIN No.: ZAE000014585
MEDIA RELEASE
Cape Town - Specialist retail group, New Clicks Holdings, today outlined the
plans for the implementation of its healthcare strategy in response to the far-
reaching changes to legislation governing pharmacy ownership which were
announced late last month.
Addressing an analysts presentation in Cape Town, group leader Trevor Honneysett
said New Clicks has invested considerable energy and resources in recent years
to position the group for the dawning of the healthcare revolution. "Our
strategy was formulated around the spirit of the National Drug Policy and it is
encouraging that our plans were so closely aligned with the legislative changes
gazetted last month."
"Clicks was originally conceived as a drugstore but owing to the regulations
governing pharmacy ownership it has operated as a drugstore without the drugs,"
he said.
Honneysett said New Clicks healthcare interests were expected to generate a
sustainable income stream in the medium to long term, although it will not have
a material impact on earnings in the current financial year.
New Clicks has assembled a multi-dimensional team with considerable expertise in
specialist areas of healthcare, wholesale distribution and retail sales, to
implement its integrated healthcare strategy.
He said the most critical issue for the introduction of a pharmacy offering into
Clicks stores is the approval of the Purchase Milton & Associates (PM&A)
transaction by the competition authorities. "The application was lodged this
week and we are confident of a positive outcome within the next three months."
Once this approval has been granted, Clicks will apply for the transfer of
licences for the 81 PM&A pharmacies and over time will convert these into the
various Clicks store formats. "We will also apply for licences to operate
pharmacies in Clicks stores which will not be serviced by the PM&A stores, and
plan to have between 20 and 25 of these pharmacies by the end of the year."
Honneysett said "We believe the turnaround in PM&A is sustainable and have
every confidence in its longer term prospects. The change in healthcare
regulations also means that the risk element in the loan to PM&A has been
greatly reduced."
He said New Clicks planned to spend around R100 million over the next three to
four years in converting stores to accommodate pharmacy dispensaries. The cost
of conversion ranges between R140 000 and R250 000 per store, before IT
expenses, he said.
"The Clicks store of the future will cater primarily for the needs of woman.
While our focus will continue to be on health, beauty and lifestyle goods, we
will be adding the exciting dimension of healthcare into some of our stores.
"This will necessitate a fundamental change to our stores and we have been
creating a new format in anticipation of these changes. We have developed a
flexible store format and the balance between our various categories will in
future depend in the size of the store, the location, and also the healthcare
needs of the community serviced by the store.
"Key to the integration of pharmacy into Clicks is that our value proposition
remains intact and we aim to provide healthcare at affordable prices."
Honneysett said an essential aspect of the new regulations is to make affordable
healthcare more accessible to a broader range of communities, and we are
committed to working with government to help make this a reality.
"Clicks will in future operate wholly-owned and joint venture stores, as well as
continuing to support franchise operations, which will allow the group to
facilitate meaningful black economic empowerment at a store level, and presents
a real opportunity for retailers and entrepreneurs in disadvantaged areas."
Ends
For further information kindly contact
Trevor Honneysett, New Clicks Holdings (021) 460-1167 / 083 700 0322
Don Bowden, Investor Relations 082 555 8721
Sue Hemp, Investor Relations 083 703 3131
Graeme Lillie, Investor Relations 082 468 1507
Date: 16/05/2003 10:00:05 AM Supplied by www.sharenet.co.za
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