Australia’s largest retailer Woolworths is seeking acquisitions and has a team examining international opportunities, chief executive Michael Luscombe told ABC television’s Inside Business programme. Failing this, Luscombe said, Woolworths will consider returning value to shareholders through a share buyback programme.
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“We try to keep a balance sheet that is flexible to enable us to take opportunities should they arise,” Luscombe said yesterday (2 February).
The supermarket giant has reduced debt by around A$1bm (US£780.15m) over the last year and has amassed a war chest of several billion dollars.
“We obviously have the ability to do some capital management and should nothing transpire in the acquisition stakes over the next 12 months or so, early in calendar year 2008 we have the opportunity to increase returns to our shareholders,” Luscombe continued.
The Woolworths boss said that the company was considering overseas expansion, but added that the retailer is wary to overstretching.
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By GlobalData“We’re not going to place Woolworths at risk by overextending in a particular area,” Luscombe said. “Our foray into New Zealand is probably the first big learning experience in managing a business in another economy although it’s very close to our own economy here.”
Woolworths owns New Zealand’s second largest retailer Foodland Associated and is currently seeking regulatory approval to acquire that country’s biggest general merchandise retailer Warehouse.
Woolworths also operates in India through a consumer electronics joint venture with Tata. “Our initiative that we have with the Tata Corporation in India is another way of us learning to live and work in another culture,” Luscombe said.
