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Mediclinic News : Netcare partnership makes sense, says Clicks CEO


Netcare partnership makes sense, says Clicks CEO




News Description

BUSINESS DAY DAVID Kneale is Clicks CEO. BUSINESS DAY TV: One of the more interesting Sens statements to cross our screens this morning was the announcement that Netcare is to outsource most of its pharmacies in the Medicross and Netcare hospitals to Clicks. Joining me now on the line is David Kneale, the CEO of Clicks. David, how did this deal or agreement come about? DAVID KNEALE: Netcare were looking to enhance their retail offer and were therefore looking for an experienced retail provider to do that, and we put forward a proposal to manage the pharmacies in the Medicross medical centres, and clearly we operate 390 pharmacies now so we’re experienced operators of pharmacies. In the Netcare hospitals themselves we’re not actually going to be operating the hospital pharmacies. Those remain part of the Netcare hospital operation, particularly those pharmacies that have a role in the hospital as well as patient-facing. What we’re going to be doing there is running their front-shop health and beauty business and, of course, where Clicks is unique is that we run pharmacies — 390 of them — but we’re also experienced in running health and beauty offers that don’t have a pharmacy, so I think that’s why our proposal made sense. BDTV: It’s quite a big number of stores and pharmacies that are going to be brought into the Clicks stable — 88 in total, in their various iterations. Does it imply quite a lot of capex that Clicks would have to spend on rebranding all these stores into the Clicks name? DK: Yes, certainly, this expands the Clicks presence quite dramatically in one go and, yes, it will be a capital spend because we want to give all of the pharmacies and all of the front shops a Clicks ‘look and feel’ so that they’re recognisably Clicks, and of course that includes the IT infrastructure so that we’re now going to be able to offer Clicks ClubCards, for example, in those facilities as well. BDTV: So you’ve got quite a nice captive audience and, as I said, it’s quite a significant number — 88 in total. Is it going to have a material impact on Clicks itself? DK: This doesn’t fit the statutory definition of material in terms of the size of its impact on the group already but of course we believe it will be beneficial to us and enhance the presence of Clicks and enhance our convenience to customers. BDTV: The capex that you would have to spend on rebranding all these stores, was this in your capex budget that you announced in more recent results, or will this be in addition to...? DK: The expectation is that we will implement this transaction on 1 October. Now that date in itself is subject to approval by the Competition Commission and we can do nothing until we have that approval. So the earliest that it will occur is from beginning of October and that’s our next financial year. So we’re budgeting for it then. It doesn’t change the guidance that we’ve given for this financial year. BDTV: Understood, and is there scope for further such tie-ups or would this be an exclusive agreement that you would have with Netcare that would preclude you from doing a similar thing with Mediclinic and with Life Healthcare? DK: This isn’t an exclusive arrangement and we’re always looking for ways that we can expand the retail and pharmacy presence of the Clicks brand because, as I said a moment ago, the convenience of “there’s always a Clicks near you” is core to our business model. BDTV: Okay, so you might actually be chasing further such tie-ups. DK: We’re always looking for ways in which we can extend the reach of Clicks.
Created at 2016/06/13 11:29 AM by Mediclinic
Last modified at 2016/06/13 11:29 AM by Mediclinic