×

We've got news for you.

Register on SowetanLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Woolworths resumes dividend despite H1 profit drop

FILE PHOTO: A shopper walks to a Woolworths store in Sandton, South Africa, August 28, 2019. Picture taken August 28, 2019. REUTERS/Siphiwe Sibeko/File Photo
FILE PHOTO: A shopper walks to a Woolworths store in Sandton, South Africa, August 28, 2019. Picture taken August 28, 2019. REUTERS/Siphiwe Sibeko/File Photo
Image: Siphiwe Sibeko

Woolworths Holdings on Wednesday resumed its interim dividend despite reporting a 35.6% slump in half-year profit, as the retailer was badly affected by civil unrest at home and extended coronavirus lockdowns in Australia.

The retailer also forecast annual turnover of R15bln- R16bln ($1bln) by its 2024 financial year, up from R12.9biln, in its fashion, beauty and home business, and margins in that business up 48% from 45.5%.

In food, its largest revenue generator business, it has a 46 billion rand target, up from R38.3bln, with margins seen more than 24% from the current 24.5%.

In its Australian fashion unit, Country Road Group, it forecast sales of 1.2 billion Australian dollars ($870mln), up from 1 billion Australian dollars.

Woolworths declared an interim dividend of 80.5 cents a share, after a two-year hiatus.

The retailer also repatriated about 1 billion rand from its Australian upmarket department chain David Jones to SA through a special dividend, which it will use to reduce its debt at home, Group CEO Roy Bagattini told analysts.

David Jones ended the half-year period to Dec. 26 with a net cash position of 347 million Australian dollars.

Overall, Woolworths said headline earnings per share (HEPS), the main profit measure in SA, fell to 168.2 cents in the 26 weeks ended Dec. 26, while earnings before interest and taxes fell 18.2% to 3.2 billion rand.

Group turnover dipped 1% to R39.2bln, while online sales grew 22.4%, contributing 13.7% to the group's total turnover and concession sales for the period.

The David Jones Food business is starting to shape up after management closed a number of stores, restrategised the business and set up partnerships, Bagattini told Reuters.

“That's really moved us from a 15 million Australian dollar loss to potentially now a break even, certainly within this current year,” Bagattini added.

Woolworths said global supply chain disruptions and high freight costs continue to pose a risk to both the cost and supply of product. It projected food inflation of 4% and 6% inflation in fashion, beauty and home.

($1 = 15.3850 rand)

Reuters

Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.