Clicks: H1 2026 profit up 6.6%, but dividend yield of 4.75% remains the key argument

On 28 February 2026, Clicks Group released its results for the first half of fiscal 2026. Revenue rose 7.4% to ZAR 49,500 million, EBITDA increased 8.1% to ZAR 6,324.9 million, and net profit grew 6.6% to ZAR 3,331 million. At the current price, the shares look attractive thanks to a moderate valuation and a generous dividend backed by low debt.

Key takeaways

— Revenue +7.4% in H1 2026 – growth continues, but no acceleration

— EBITDA margin 13.1% – stability amid revenue growth

— Net profit +6.6% – slower than revenue due to stable margin

— Net debt ZAR 786.7 million – low level, but increased over the year

— Dividend yield 4.75% – attractive relative to the key rate

— Valuation: P/E 13.3 and EV/EBITDA 7.1 – below historical averages

— Portal's model implies +6% upside

Attractiveness

Key figures, ZAR bn

Revenue +7.4% in H1 2026 – growth continues, but no acceleration

For the first half of fiscal 2026, Clicks' revenue reached ZAR 49,500 million, up 7.4% year-on-year. This is moderate growth, showing no acceleration but also no slowdown – the company is steadily increasing sales.

The main driver remains the retail chain, which continues to expand and grow like-for-like sales. However, the report does not disclose segment details, so we cannot single out specific growth factors.

EBITDA margin 13.1% – stability amid revenue growth

EBITDA for H1 2026 rose 8.1% to ZAR 6,324.9 million, with margin at 13.1% versus 13.0% a year earlier. This indicates that the company maintains operational efficiency despite inflationary pressure and rising costs.

Stable margin is the result of cost control and economies of scale. However, we do not see significant improvement, which limits the potential for profit growth above the revenue pace.

Net profit +6.6% – slower than revenue due to stable margin

Net profit for H1 2026 reached ZAR 3,331 million, up 6.6% year-on-year. Profit growth lags revenue, explained by a stable net margin of 6.2% – the same as a year earlier.

The lack of margin improvement means operating leverage is not fully working. The company may be investing in growth, which holds back short-term profit but could pay off in the future.

Net debt ZAR 786.7 million – low level, but increased over the year

As of the latest balance sheet date, Clicks' net debt stood at ZAR 786.7 million. The net debt to EBITDA ratio for the trailing twelve months is 0.12, a very low level indicating significant financial strength.

Over the year, net debt increased by ZAR 0.8 billion (in RUB equivalent per facts), likely related to funding dividends and capital expenditures. Nevertheless, leverage remains minimal, and the company has a large safety margin.

Dividend yield 4.75% – attractive relative to the key rate

Over the trailing twelve months, Clicks paid dividends yielding 4.75% at the current price. This is significantly above South Africa's key rate, making the shares attractive for income-oriented investors.

We expect the company to continue paying dividends this year, based on stable profit and low debt. However, the payout will depend on company policy and potential one-off costs. If profit remains at the trailing twelve-month level, the dividend could be comparable to the previous one.

Valuation: P/E 13.3 and EV/EBITDA 7.1 – below historical averages

Current P/E based on trailing twelve-month profit is 13.3, and EV/EBITDA is 7.1. These multiples look moderate and are likely below their own three-year averages, indicating undervaluation relative to history.

Return on equity (ROE) of 47.2% is impressive and confirms business efficiency. Given these metrics, the valuation does not appear stretched, especially considering steady revenue and profit growth.

Portal's model implies +6% upside

According to the portal's model, based on EBITDA growth and a target multiple, the fair value of Clicks' shares is 6% above the current market capitalization. This is moderate upside, not implying significant re-rating.

Thus, the model confirms that shares trade close to fair value, but with a slight discount. The main appeal lies in dividend yield and business stability, not in expectations of strong capital appreciation.

Valuation on the latest reported figures

Bottom line

Clicks shows stable but not outstanding growth: revenue and profit are increasing at moderate rates, margins remain almost unchanged. The financial position is solid: net debt is minimal, and ROE is high. The dividend yield of 4.75% is the main argument for buying, especially given low leverage. The valuation is moderate, and the portal's model shows slight upside. Overall, the shares look attractive for conservative income-oriented investors, but do not promise significant capital appreciation.