Woolworths Group Ltd (ASX: WOW) released its half year report to the ASX on Friday revealing a 38% increase in profit and dividends of 43 cents per share.
Woolworths Group is one of Australia and New Zealand’s leading supermarket operators, with stores dotted across both countries. It also owns Big W, BWS and Dan Murphys.
Here are the key news headlines from the Woolworths half year report:
- Revenue rose 3.8% to $30 billion
- Profit rose 38% to $969 million
- An interim dividend of 43 cents per share was declared
- Earnings before interest tax (EBIT) rose 10% to $1.4 billion
Reflecting on the half, Woolworths CEO Brad Banducci said the company is moving from turnaround to transformation. “In the current half we have seen some early signs of this transformation with good progress on a number of strategic initiatives and pleasing sales growth from all of our businesses,” Banducci said.
“We remain committed to our focus on building a customer and store-led culture and team with a highlight in the half being the continued improvement in customer, team and supplier advocacy scores across the Woolworths Group.”
Woolworths’ Australian Food business reported a profit of $901 million, up from $812 million a year earlier. “In Australian Food, despite beginning to cycle some more challenging prior year numbers, sales increased by 5.1% with a strong second quarter (comparables sales: +5.0%),” Banducci said.
The Endeavour Drinks business, which includes BWS and Dan Murphys increased its profit result 2.6%. However, sales continued to grow. Banducci added, “Both retail banners outgrew the market in the first half with December sales for both Dan Murphy’s and BWS a highlight.”
In New Zealand, comparable store sales rose 3.3%, with online sales a key priority for the business.
Big W, a company under increasing competitive pressure from Wesfarmers Ltd’s (ASX: WES) Kmart and Target, as well as online stores, reported a slightly higher sales result. Big W’s loss narrowed from $27 million to $10 million but Mr Banducci said the retailer is expected to post losses of between $80 million and $120 million as over the full 2018 financial year.
Commenting on Woolworths’ outlook, “The emphasis on transforming our business will continue in the second half and into FY19,” Banducci said.
“In Australian Food, we will begin to cycle the strong second half sales recovery in FY17 which may see a moderation in the sales growth rate for the second half. For the first seven weeks of H2’18, Australian Food comparable sales growth has been approximately 3.7%, impacted by the timing of New Year’s Day.”
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