Clicks Group Ltd S/Adr

Good afternoon and a warm welcome to the webcast of my annual results for the year ended 31 August 2026. I'm Ms Hina Engelbrecht, Chief Executive Officer of the CLICS Group. Joining me here today is Gordon Trail, our Chief Financial Officer. We will be taking you through the presentation of our annual results and respond to your questions after the conclusion of our presentation. This slide sets out the outline you will follow. I will start with a review of our financial there. Gordon will follow with an overview of our financial results. I will then take you through the trading performances and strategic growth drivers of our retail business, followed by UPB. And I will close with the outlook and strategy for the Group. Please submit any questions that you may have via the webcast platform during and after the conclusion of our presentation. who came from my investor relations team will read out your questions to which Gordon and I will respond. I will now commence with a review of the year. Despite a trading environment characterised by weak macroeconomic conditions and intensified competition, the Group nevertheless grew turnover by 5.4% ahead of inflation and exceeding R50 billion in turnover for the very first time. We continue to invest in our market leading health and beauty portfolio ending the year with 1,031 click stores and 835 click pharmacies. We met our new store opening target and exceeded our new pharmacy opening target. Active Top Cart membership increased to 13.1 million customers who contributed more than 84% of sales. We expanded our healthcare footprint through the opening of four additional 24-hour unicare facilities, bringing the total to five sites across three provinces. During the year, we also accelerated certain strategic growth drivers. We launched Formaki, our new township convenience retail brand. We increased our shareholding in ARC to strengthen our position in the premium beauty markets and completed the acquisition of Mr. First Aid, a medical consumables business that supports UBD's strategic objectives of increasing share of wallets within private hospitals and of expanding access to new markets. Operational execution remained a key focus as we further tightened cost control, following initial challenges thrown out of the warehouse management system to our Durban Distribution Centre was completed in June. We continue to advance our sustainability agenda, increasing the proportion of UBD's full-fledged electric vehicle fleet to 86% and deploying the first fully electric retail distribution fleet in Cape Town. We return R3.4 billion to shareholders through dividends and share buybacks, while remaining resolutely focused on execution and on protecting our total income margin. Gordon will provide you with more detail on our financial results, so let me now hand over to you.

Thank you Bettina. Despite a tough trading year, the Group continued to focus on its key metrics. Group turnover increased by 5.4%. Retail turnover grew 4.2% from the year with the second half slower. UPD also had a slightly slower sales growth in the second half Total Income Margin declined by 10 basis points Margin improved in retail by 90 basis points while in UPD there was a 90 basis point decrease resulting from the lower single exit price adjustment as well as the non-renewal of two distribution contracts in the prior year The Group Trading Margin at 9.7% reduced by 10 basis points due to the lower profit in UPD diluted headland earnings per share for the Group increased to R14.22 per share, up 4.4% on last year, within our guided range of 4-9%. The Group's operations generated strong cash inflows of R6.3 billion, and during the year we returned over R3.4 billion to shareholders in dividends and share buybacks. The Group's return on equity at 48.7% remained sector-leading. and the dividend declared for the year has been increased by 4.4% to 925 cents per share, which is a 65% payout ratio. Retail had a slower second half due to increased competition and the increasingly under-pressured consumer. UPD fine sales improved on last year, but bulk sales improved strongly in the fourth quarter, up 25.6%. Retail grew 4.2%, the same stores growing 1.8%. New stores and pharmacies added 2.4% to the top line, while selling price inflation averaged 1.5% for the year. The distribution business had a consistent performance in the second half, with good compliance for its major sales channels. The growth was supported by clicks and bulk sales. Bettina will cover the detail of each business's performance later in the presentation. This slide reflects our total income earned, which has increased by 5.1% for the year. You can see the total income margin in retail was 90 basis points higher than last year. Despite increased competition, margin has evolved. BPD's total income margin was down 90 basis points to 9%. This was due to the lower SEPA increase granted in the current year and the non-renewal of two distribution contracts in the prior year. Overall, the growth of the retail business at 6.8% was offset by the lower UPD margin and has resulted in the Group's total income margin being 10 basis points lower than last year. Retail costs grew 5.6% with lower growth in the second half of the financial year and remained well controlled. In the second half, cost growth was 5%. We continued to invest in the business, resulting in higher depreciation, which has been offset by lower employment costs. In the year, we have added a net 41 click stores and a net 60 pharmacies. Other costs were impacted by increased advertising, electricity and software license costs. Comparable retail cost growth, excluding new stores, was up 3.6% from the year. with costs growing at a lower rate than the second half. The IFRS 16 interest charge increased as a result of renewals and new stores in the period. However, it has continued to moderate in growth from the prior year. UTE's costs remain well controlled, costs in the second half being lower than the first half. It is pleasing to note that costs grew 6.8% in the first half and 1.5% in the second half. Other costs, although high, was impacted by some one-off charges. Overall costs were well controlled. Retail trading profit grew by 9.9% with the margin improving by 50 basis points to 11%. This has been due to strong other income generation together with efficient cost management. UPD's trading profit decreased by 10.4% with the trading margin decreasing by 60 basis points 2.7%. This, as previously highlighted, was due to the low SEPA and the non-renewal of day distribution contracts in the prior year. Overall, the Group's trading profit increased by 4.7% to $4.9 billion for the year. This slide reflects the growth in turnover, trade and profit margin of the Group over the past five years. The company has sustainably grown its performance through various economic cycles. Although the year started positively, we have seen interest rates and inflation increasing. Despite this, the Group was focused on those aspects of town control. That said, the Group has demonstrated its ability to continue to improve the trading margin over the past 5 years. Inventory levels from the Group have increased by 4 days to 82 days. Retail stop days are 2 days higher than last year. Inventory remains well controlled. UPD stock days at 50 days are 5 days higher than last year partially due to higher levels of stock held for medical consumables, GLP-1, new product launches and strategic purchases. Overall working capital was well managed with net working capital days at 33 days. This slide shows the movement of cash year-on-year. As you can see we started the year with cash of $3.3 billion reflected in dark blue on the left hand side and ended the year with $2.3 billion on the right hand side of the slide. The Group has generated cash of $6.9 billion highlighted in green, working capital outflows of $650 million, repayments of leased liabilities amounting to $1.2 billion and tax payments of $1.1 billion. 1.2 billion was reinvested in capital expenditure across the Group Of this amount 679 million was invested in new stores as well as store refurbishments 155 million was spent in distribution centres and 332 million was spent on IT and other retail infrastructure We returned 3.4 billion to shareholders this year This was in the form of dividends of 2.1 billion and share buybacks of 1.3 billion. The final cash dividend of 1.5 billion will be paid out to shareholders in January 2027. This slide shows our commitment to a disciplined approach to capital allocation. We expect to continue to invest in the business and return capital to our shareholders through dividends. Over and above this, our preference is to return any excess cash through share buybacks which is demonstrated in this graph. Since 2006, we have bought back 168 billion shares at a cost of 9 billion. On 31 August 2026, closing share price, the value of these shares would have amounted to 33.4 billion. CapEx of over 1.4 billion is planned for the year ahead. 780 million will be invested in our store and pharmacy network. This will include 40-50 new quick stores and pharmacies and 70-80 retail store refurbishments to ensure they remain modern and relevant to our customers. $673 million will be spent on IT systems and infrastructure. $90 million of this amount will be invested on UPD IT and warehouse equipment and we will invest the balance of $583 million in retail IT systems and infrastructure. This will include omni-channel initiatives, efficiency improvements and on-demand pharmacy. We will continue to grow and invest in our retail footprint. On this slide is shown the investment that has been made in our stores, IT and infrastructure. The dark blue block highlights the investment in our UPD distribution business. A higher capex in 2022 and 2023 reflects the investments made in SAP map systems. This is subsequently normalised, as can be seen in the reduction in capex in subsequent years. The green block details investments made in our infrastructure and IT. Since 2022, we have replaced our pharmacy management system, invested in our retail warehouse management system, invested in our dark store and online platform. The light blue block details our investment into our stores. In 2022, we invested £457 million in new stores and refurbishments. In 2027, this has been increased to £780 million. This shows our commitment to ensure that all our stores remain modern and appealing for our customers. Despite the past 12 months, our metrics remain strong. We believe the Group has continuing headroom for growth, particularly in expanding the retail store base and the development of our online offering. We will not be revising these targets at this time. In framing these medium-term targets, we remain focused on optimising the balance sheet, improve working capital efficiency, enhance cash returns to shareholders and maintain the dividend payout ratio between 60% and 65%. This slide demonstrates how the Group has continued to sustain its financial performance over the past decade. Despite the more difficult year we have had in 2026, The longer term returns remain strong. This is reflected in the 10 year Compact Annual Growth Rates achieved in Deleted Headline Earnings per Share of 12.5% per annum and Dividend Per Share Growth of 13% per annum. The Compact Annual Total Shareholder Return over the past 10 years increased to 11.4% per annum. These growth rates have been driven by strong organic growth, particularly in our health and beauty business, supported by an efficient supply chain. This has allowed us to deliver strong cash returns which have not only been reinvested in the business but also allowed us to progressively increase our dividend. Our acquisitions will strengthen our future returns. I will now hand over to Bettina who will cover the trading performance of each business.

Thank you Gordon. I will now take you through our trading performances starting with retail and then UPD. The retail performance was characterised by subdued consumer demand, high fleet price competition and uneven category growth. Retail sales growth was positive but concentrated. Pharmacy, beauty and personal care carried the performance, while some lower growth front shop categories constrained overall momentum. The lower front shop sales growth was in part due to the adverse impact of our WMS implementation over the peak trading period as well as by intensified competitive pressures. The quality of earnings was supported by disciplined margin management, supplier recoveries and effective cost control. I will now provide greater detail on our category performances, market shares and on our strategic growth drivers. Pharmacy was the strongest growth driver, increasing by 7.3% and contributing 27.6% of retail sales. Growth was hit by diabetes and GLV-1 medicines. Sales growth was impacted by another soft, cold and flu season. The stronger growth in pharmacy is positive and we have retained the customer in our stores. Frontiers Health and Baby grew by 2.2% and contributed 25.1% of retail sales. The performance in healthcare merchandise was constrained by muted growth in supplements, sports and swimming, and some supply constraints. Within the baby category, diaper deflation, aggressive competitor promotions, and supply info challenges weighed on performance, while baby foods and infant formula were positive offsets. Beauty and personal care The largest grouping at 32.6% grew by 4.5%. Personal care benefited from stronger growth in private label, luxury bath, sun care and oral health. Beauty was supported by pharmacy skin care, paid beauty and our continued beauty haul rollout. Growth was moderated by competitive discounting and a weaker performance in facial skin care. General merchandise grew by 1.3% and contributed 14.7% of retail sales. Performance was impacted by paperware deflation, promotional intensity, and reduced clearance activity, whilst domestics, impulse confectionery, and snacks provided the principal positive aspect. Clicks gained share in pharmacy, health leadership positions across all major health and beauty categories, and successfully defended its category leadership despite the most aggressive promotional and digital competition seen in years. We increased our retail pharmacy market share to 24.7%, strengthening our position as the country's most accessible healthcare provider and affirming the strength of our healthcare proposition and store network. is the highest quality traffic driver and genuinely needs friendship growth over time. This is because prescription customers are highly loyal, shop more frequently and buy across multiple categories. Friendship health market share decreased to 32.6%. While promotional indemnity increased across the category, Kix nevertheless maintains a clear leadership position. Our daily market share remains effectively flat in value terms, whereas volumes increased. Despite competitive intensity, the retention of our health customer remains strong, supported by our loyalty program. I will now turn to Gleason. While skincare share reduced by 100 basis points, Gleason remains the clear market leader, with the share exceeding 40%. More than 4 out of every 10 grand spent in skincare is spent at a click store enabling us to maintain an unmatched position in the category despite increasing competition. The AHA market share remained resilient at 32.6%. This reflects the strength of the click's assortment, loyalty proposition and categorization with approximately one-third of national skincare spend continuing to flow through the QIX network. Personal care is an underrated success. It is a high-frequency driver, reflects everyday shopping behavior, and is sensitive to pricing and value perceptions. Share increased from 22.6% to 22.1%, which indicates that the combination of private label, exclusive brands, and promotional offers resonates with customers. share gain of 100 basis points in general merchandise is significant because it shows that the Clicks brand extends beyond the healthcare and beauty and that customers increasingly view Clicks as a broad and shopping destination. Our market leadership demonstrates the resilience of our brand strength and customer proposition. Our revitalized club card program provides a significant competitive advantage fueling an increasingly powerful customer offer. Active membership grew to 13.1 million customers and accounted for 84.2% of sales, while cashback paid to members reached close to a billion rand. We launched the Pay Even Less campaign in August, providing Club Card members with an additional 10% discount on approximately 3,000 products. Combined with expanded banking, Fuel and Lifestyle Partnerships. This further strengthens our customer value proposition at a time when consumers remain under financial pressure. We extended our Club Card Offer Partnerships. The Joint Kicks, Aging and F&B R&B Campaign delivered strong customer engagement and was recognized as the best short-term loyalty marketing campaign at the 2026 FA Loyalty Awards. This highlights the strength of our partnership-led approach and the growing relevance of TopCard beyond the walls of our source and our online platform. Another key milestone was the extension of our banking partnerships. We expanded the program, adding both Standard Bank and AXA alongside a substantially enhanced F&B proposition. This creates a broader, more inclusive customer offer allowing customers to both earn and redeem value regardless of their banking preference. By the end of this month, we will be launching our partnership with the National Food Grocer, extending Club Card into more of the customers' shopping missions. The strategic importance of Club Card is core to our business and is strengthening our customer value proposition. It drives retention, frequency, basket growth, and Partner Engagement, while creating multiple avenues for customers to earn and save across their healthcare beauty, fuel, banking and lifestyle needs in an inclusive manner. Health is our strongest loyalty anchor and our most important traffic driver. During the year, we expanded to 835 pharmacies, 225 clinics and 5 unicare specialist pharmacies. More than 54% of South Africans now live within 5km of a click store, reinforcing our position as the country's most accessible healthcare retailer. We are extending our healthcare proposition beyond the store. We are holding our pharmacy on demand offer to ensure regulatory compliance. Our current OTC trial is in 23 click stores which will extend to 50 stores in December. and thereafter to acute trips. Through Unicare, we have established capabilities that enable us to offer 24-hour medicine delivery in key metropolitan markets. We are laying the foundations for future growth in specialist healthcare by leveraging the Unicare platform. Our private label healthcare portfolio will be strengthened by a private label GLP-1 product. We are evolving clicks from South Africa's leading pharmacy retailer into an interconnected healthcare platform. Our strategy remains centered on a pharmacy in every store, supported by clinics, specialist pharmacy capabilities, 24-hour delivery through Unicare, and expansion into higher growth healthcare segments such as oncology. Together, these initiatives strengthen our competitive advantage and significantly expand our long-term growth opportunities. As I've highlighted, our strategy is to expand across the healthcare value chain. Unicare is a key enabler of that strategy. Our five specialist pharmacies provide 24-hour access to medicines, healthcare advice, as well as a range of specialized services. Importantly, Unicare enables us to offer 24-hour pharmacy delivery and specialist pharmacy services in major metropolitan hubs, extending healthcare access beyond our bookstore network. Unicare also creates a pathway into higher value healthcare segments. We are continuing to build specialist pharmacy capabilities and are progressing our oncology aspirations aimed at improving patient access to oncology medicines and services. This is an attractive long-term market. While VK currently operates from five locations, we see significant scope to expand the footprint to up to 20 sites over time as demand for specialist healthcare grows. By expanding across the healthcare value chain, we are unlocking new profit pools, increasing our addressable market, and creating a longer runway for sustainable growth. The Arc, Sorway Group and Kix Beauty Businesses create a more comprehensive beauty offer that allows us to participate across multiple customer needs, occasions and same categories. Sorway is South Africa's largest professional beauty services brand, delivering more than 4.4 million treatments annually through a network of 211 salons. This business is highly scalable through its franchise model, creating an attractive capital-light growth platform. During the year, Sorbet continued to strengthen its market position across beauty, nails, hair and nail screwing. We remain particularly excited about the potential of the Sorbet Man format as this gives us exposure to the fast-growing male grooming segment. The business has also taken its first steps outside of South Africa with a master franchise agreement in Botswana and discussions progressing in Mauritius. We see meaningful potential to grow product sales through digital channels by leveraging Texas scale, product development, sourcing and growth capabilities to strengthen customer engagement. ARC is central to our ambition to capture a greater share of the premium beauty market, estimated at approximately 6 billion grand. ARC gives us exposure to a faster-growing, more resilient segment of the market, while compromising the strength of the Clix Beauty offering. During the year, ARC expanded to 11 stores alongside its online platform, with a clear pathway to between 20 to 25 stores, same-store sales growth significantly outperformed the market, reflecting strong demand from Millennial and Gen Z customers for differentiated premium pretty brands. AFT, though, is not a standalone investment. It strengthens the broader clicks customer value proposition. AFT customers spent approximately 866 million value clicks over the last 12 months. affirming the power of our integrated beauty offer to grow the customer lifetime value across multiple formats. Our increasing shareholding reflects our confidence in the long-term opportunity. During the year, our equity stake increased from 22.7% to 25.7% and, subject to the required approvals, is expected to increase to 61%. From a strategic perspective, provides three attractive growth levers. Exposure to a growing premium beauty category, access to younger customers, as well as the opportunity to participate more broadly across the beauty value chain. Our private label and exclusive brand strengthen differentiation, enhance our value proposition and supports margin management. This past year, sales exceeded R10 billion, contributing over 30% to front-shop sales and over 12% to pharmacy sales, a formidable milestone for private label teams. We have both customer trust in our brands because of our relentless focus on quality and efficacy, and we are proud that 17 private label brands were voted SA Product of the Year in their respective categories. Over the past few months, the team has been developing a premium private label diaper for launch in March next year. They have also worked with our local manufacturing partners to launch 100 Komaki products. An exciting milestone this year is the launch of the iconic Boots No. 7 Future Renewal Skincare Raging Picks. Boots No. 7 is the top 10 skincare brand in most markets in which it is available. This exclusive relationship undermines the strength of our partnership and opens up opportunities for other appropriate food strangers. This affirms the global recognition of our position as the market leading health and beauty retailer in Southern Africa. Our objective is simple. Make it easier for customers to access health care, beauty and everyday essentials whenever wherever and however they may choose. Today the Group operates more than a thousand stores including 840 pharmacies and 225 clinics, giving us one of the largest and most accessible healthcare and beauty networks in South Africa. Importantly, 270 stores are located in lower income communities, ensuring that quality healthcare and affordable products remain accessible to a broad customer base. Online sales, supported by increasing adoption of on-channel services, has become a meaningful convenience channel for customers. The re-launch of the QIX app and continued growth in downloads strengthens our ability to engage customers both digitally and personally. What differentiates QIX is not simply the size of our footprint, but the combination of physical reach Digital Capability and Trusted Healthcare Services. Accessibility drives growth. Every additional touchpoint, whether a store, pharmacy, clinic, app, click and click location, or on-demand service, strengthens customer engagement, expands our reasonable market, enables us to scale adjacent growth opportunities, and reinforces the long-term competitive advantage of our retail business. The Group was an early adopter of renewable energy solutions. Whilst we first reported on our green transition in 2017, the research and planning that informs our sustainability agenda had started much earlier. Our main dream is that doing right for business is right for people, planet and profit. As committed stewards for future generations, We embrace our duty to ensure that we are lightening our carbon footprint in an efficient and cost effective manner. We are making steady progress, which I will now highlight. All of our own DCs are covered by solar. 86% of the Yippity wholesale fleet is covered by EV trucks operating out of all of Yippity's distribution centres. Our retail Cape Town DC is the first African DC to operate a 100% electric fleet. We have purchased our first EV bikes for pharmacy and online delivery in high density modes. Our investments in charging infrastructure, battery backup, solar investments and EV vehicles means that renewable energy solutions are in place across most of our transport and distribution network. The annual fuel savings and mitigation against high electricity increases is positive for our OPEX line and for customer service. The final growth platform I would like to highlight is Quamati, which reflects our strategy of expanding into new customer segments. Quamati is a purposeful, convenient format designed for underserved communities. It offers trusted brands, smaller pack sizes, everyday low prices and essential health, beauty and household products in a smaller, more accessible footprint. The market extends the reach of the Group. It allows us to access a significantly larger convenience market to deepen private label penetration and create a new opportunity for growth in communities where a quick store may not always be the most appropriate model. We currently operate 4 private stores which will increase to 10 by the end of this calendar year. We are encouraged by the early customer response. The success of our Komaki private level portfolio is encouraging with sales contribution already outstripping the space allocated to it. Our private level team working with 5 key partners to develop 100 Komaki products is to be commended and this will grow. Together, Unicare, Solvay, ARC and Guamaki demonstrate how we are systematically expanding our growth opportunities. Each new strategic growth driver increases our participation in attractive adjacent markets and creates additional avenues for sustainable long-term earnings That completes the review of the retail business. UPD had a tough second half primarily due to the low single exit price adjustment. The muted turnover growth was led by strategically attractive channels, clicks, unicare, private hospitals as well as exports. UPD's exceptional operational metrics demonstrates the reliability of its platform which supports purchasing compliance and customer retention. We are balancing investment in availability and growth with active working capital management and tight cost control. UPD strengthens the economics of the pharmacy in every click store, enables the expansion of unicare and specialist healthcare and broadens our participation across hospital, independent pharmacy and export channels. UPD's total managed turnover which includes fine wholesale sales and turnover managed on behalf of bulk distribution clients grew by 4.1% to R31.8 billion with generic medicines accounting for 77.8% of sales by volume and 58% of sales by value. The contraction of the hospital market driven by increasing generic substitution and more efficient formula pricing coupled with a very low single exit price adjustment informs UPE's lower sales value growth. Gross wild sales, fueled by the growth in GLP-1s, was up a whopping 37%. The four-year performance reflects the loss of two notional distribution partners in the second half of 2025. We have now successfully integrated Mr. First Aid, enabling us to market our medical consumables product portfolio to hospitals. The UPD team focused on improving quality, customer and operational metrics as well as site cost control to deliver a respectable result. All distribution sites underwent an ISO 9001 recertification process and all UPD sites are ISO 13485-35. UPD managed their costs exceptionally well. supported by our early adoption of solar, battery storage and electric vehicles. In March, we received another 43 EV vehicles, now covering 86% of the UPG wholesale fleet and enabling EV deliveries from all UPG to DCs. UPG's fine wholesale turnover was up 5.7% despite another subdued winter season and extremely low SEP increase of a maximum of just 1.47%, so excellence and quality are core UBD strengths. The customer info rate of 99.2% improved over the prior year, whilst OTA of 96.3% was just 0.1% lower than the prior year, even despite the impacts of road closures in coastal areas due to adverse weather conditions. UBD has strong market shares in disciplined Purchasing Compliance to the Group Target of 98% Sales grew by 9.1% and accounted for over 60% of sales Purchasing Compliance by Unicare has improved significantly from 25% at the end of Q1 and is now comfortably within their targeted range Performance of the Hospital Channel was characterised by Mutual Value Growth Primarily driven by increased generalisation, purchasing compliance to UPD improved as hospital groups increasingly looked to partner for mutual benefit. The UPD team is making steady progress in the acute hospital space where UPD's market share has now increased to 38%. Although the independent pharmacy channel declined by 15.5%, The team are making inroads driven by franchise promotions, which positively impacts the margin quality. Export sales increased by 11.4%, supported by growth in new customer accounts. The wholesale market share decline is a factor of the contraction of the hospital channel. This is the reason for us pursuing medical consumables. The acquisition of Mr. First Aid facilitates UBD's entry into the commodity medical consumables market segment estimated at an addressable R8 billion. Mr. First Aid is a natural adjacency to UBD's network and supports its future positioning as a broader healthcare partner. Although this is a hugely fragmented market, Mr. First Aid is already a leading distributor of medical devices and Consumables throughout Southern Africa. Its product portfolio carries over technical lists and in turn it will benefit from UBD's procurement scale, central stockholding and network. The addition of Mr. First Aid has the potential to broaden the addressable market beyond private hospitals at a better margin than that of single exit prices medicines. This completes the review of our trading performance for the year. This was our most challenging year by far. The sustainability of our business model and quality of our execution capability were questioned. I asked our teams to deliver a credible performance and to do so in a manner that was both measured and sustainable. The teams delivered on the ask. Most importantly, they did so in a way that creates momentum for an improved 2027 performance. Our revitalised Club Card offer is unmatched in terms of its finity partners and comprehensive customer value. We have now matched price sustainably. The growth in new Club Card enrolments is a positive endorsement that we have gotten it right. The heart of our business is our people. On behalf of our board and executive teams, I extend my gratitude and thanks to all of you. I will now conclude our presentation with the strategy and obstacles. We remain confident in our ability to deliver sustainable growth and long-term shareholder value. We operate in defensive health of many categories with attractive long-term growth drivers, hold leading market positions across retail, wholesale and distribution, and continue to gain scale in our core businesses. Our strategy is simple, grow the core, expand the ecosystem and invest for the future. We see significant runway in profitable store expansion, pharmacy growth, private label, digital and top cart. We are also harnessing new growth opportunities through Unicare, Qamaki, Sorbet, Medical Consumables and LEAP. As we grow, scale will drive greater efficiency, stronger customer value, and attractive returns. We have a resilient core, multiple growth engines, and a clear path to sustainable long-term growth. That is what gives us confidence in our ability to achieve our medium-term targets and continue creating value for long-term shareholders. We expect the consumer environment to remain constrained in the near term. Higher fuel costs and higher interest rates will raise pressure on disposable income, although the stronger rank should provide some offset. Sun price inflation is expected to remain low, which is why we appreciate the second S&P increase of 2.88% effective the 1st of October this year. The retail environment will remain highly competitive and promotion driven. Our response will, as always, be customer-led and disciplined. The encouraging early response to the revitalized Club Card offer reinforces our confidence in the strength of our loyal platform and its ability to support value and customer retention. The store network remains an important and proven growth engine. We are targeting 1200 click stores over the medium term and plan to open between 40 and 50 stores a year. This though is not simply a space growth strategy. We will continue to improve the productivity of the existing estate, expand pharmacy access and strengthen the economics of every store. We are also scaling adjacencies that extend our addressable markets and deepen customer relationships. Unicare will establish a network of between 50-20 specialized pharmacies, strengthening our position in specialty healthcare and supporting our aspiration in areas such as oncology. It also enables 24-hour delivery within core metropolitan hubs. The market provides a longer-term opportunity to serve customers in underserved markets through an accessible, convenient format. Sorbet and Ogg extend our participation in professional beauty services, grooming and premium beauty, while medical consumables annually broaden our reach into attractive and complementary health care categories. A further strategic lever is the contribution of private-level and extrovert brands. We are targeting 35% contribution in friendship and 18% in pharmacy. This should strengthen differentiation, customer value, and Margin Resilience while remaining grounded in quality and trust. We plan, as Gordon pointed out, to invest approximately R1.5 billion in capital expenditure to support stores and pharmacies. But equally important, the system's data and omnichannel capability requires improved execution, productivity, as well as the customer experience. In summary, We are managing immediate consumer and competitive pressures while continuing to invest behind clear, long-term ambition. We are protecting the resilience of the core, investing with discipline, and building multiple growth engines to extend our leaderships in health, beauty, and wellness. Thank you for listening. I will now hand over to Suhem to assist us with taking your questions.