SOUTH AFRICA: Woolworths reports unaudited H1 group results
South African retailer Woolworths has reported positive results for its first half, the six months ended 31 December 2001.
Company chairman CA HAll and CEO Simon Susman commented that trading in all divisions of Woolworths was encouraging, with profit before tax for the six months rising 26.9% to R289.8m (US$25.3m). From continuing operations, revenue was up 19.1%.
Foods sales increased by 24.4% in the period, and Woolworth's market share rose to 6.3% (2000-5.8%). This was attributed to the positive response of consumers to improved product innovation and the increased number of locations. Like-on-like turnover improved by 13.9%.
Woolworths Financial Services continued to grow the Woolworths card and the personal loan books. The books are in a low risk part of the market and management remains vigilant. Net bad debts were within budgeted levels.
Woolworth's textiles business meanwhile concentrated during the period on improving its range and availability, a strategy that resulted in a rise in sales of 12.6% and a growth in market share on a twelve month moving average to 16.7%.
On 17 January 2002, Woolworth's Australian subsidiary Country Road saw its US operation placed into Chapter 7 liquidation.
Country Road's exit from the US market resulted in a write-off of net assets amounting to A$18.9m and other costs and provisions of A$5m (R112.8m after minority interests). The loss in discontinued US operations limited the increase in headline earnings from all operations to 14.0% for the period under review and net profit before tax and exceptional items to 23.8%.
Having exited the US market, Country Road in Australasia returned a small profit of A$0.3m (2000: A$1.2m loss) mainly due to tight expense control. The R10.3m profit resulted from Q2 profits being translated at an exchange rate significantly weaker than the rate at which Q1 losses were sustained.
Country Road is now able to concentrate on the core Australasian market and markets with similar climates. The production of one range will result in significant cost savings and importantly will ensure greater focus on the design and delivery of that range.
Board of directors
The company's board welcomed Sindi Zilwa, who was appointed a non-executive director with effect from 1 January 2002.
The company announced an interim dividend of 7.5 cents per share for the six month period, an increase of 15.4% year on year. It is payable on 18 March to all registered shareholders on 8 March 2002.
Share certificates may not be dematerialised or re-materialised between 4 March and 15 March 2002, both days inclusive.
Companies: Woolworths Ltd
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