CAPE TOWN Health, home and beauty retailer New Clicks Holdings will spend about R100m over the next three to four years to convert its stores to accommodate pharmacy dispensaries after the changes in Pharmacy Act regulations gazetted earlier this month permitting nonpharmacists to own pharmacies.

The cost of conversion is about R140 000 to R250000 for each store before information technology expenses. The additional investment and the effect of the changes are expected to generate medium to long-term sustainable income, but would be immaterial in this financial year.

New Clicks shares have gained about 5% to 570c in the three weeks since the regulations were published.

New Clicks group leader Trevor Honneysett said on Friday that the group filed an application to the competition authorities last week to approve its acquisition of Purchase Milton & Associates (PM&A), the pharmacy chain that Clicks financed by way of a R355m loan two years ago.

Honneysett said that once approval for the acquisition is obtained Clicks will apply for the transfer of the licences of the PM&A pharmacies and will gradually convert these to the various Clicks store formats.

Larger PM&A stores will be converted into Clicks stores and where there is a smaller PM&A store close to an existing Clicks store, the licence could be moved to the Clicks store.

Clicks brand leader Lara Bryant said there would be four distinctive new Clicks formats.

Clicks subsidiary United Pharmaceutical Distributors (UPD) brand leader Kevin Vyvyan-Day said UPD was well placed to benefit from the new regulations relating to medicines, specifically promoting generic rather than branded drugs and original source procurement.

UPD already has a higher market share in generic medicines and has sourced its drugs from the manufacturers or their designated agents for the past six years.

If pharmacists are obliged to charge a fee for services rather than a mark-up on drugs, they would probably carry less stock and UPD, which is a high volume distributor serving a range of independent dispensers, would be required to increase deliveries.

May 19 2003 06:42:50:000AM Charlotte Mathews Business Day 1st Edition