Coles Myer chief executive John Fletcher told investors at the company's AGM today (20 November) that full year profits are expected to be flat for fiscal 2007.

"Barring any significant downturn in the retail environment over the important Christmas period, we are on track to deliver the AUD$787m (US$605.26m) net profit," Fletcher said.

Australia's second-largest retailer is cutting costs and streamlining its operations in an attempt to reinvigorate sluggish business. "We expect an improving trend throughout the remainder of the year as strategic initiatives gain traction," Fletcher told investors today.

The company's vision of the future, its "big idea", Fletcher said, was "the formation of an integrated supermarkets, liquor, convenience and general merchandise business providing the everyday shopping needs of Australians under one brand."

The company plans to phase-out its Bi-Lo supermarket brand, having already converted 55 stores, cut 2,500 support staff over two years and introduced supercentres offering food, general merchandise and apparel. Fletcher said that job cuts were already underway, with 525 jobs expected to have been lost by December.

Fletcher said that the Coles' 2008 performance is expected to improve as investments begin to pay-off. "The FY08 guidance of $1.066bn is driven by the full year impact of simplification, a growing contribution from out transformation programme and the benefits of the store and format investments," Fletcher said.

Shares in Coles Myer, which last month rejected a takeover bid of $18.2bn from a private equity consortium, remained relatively steady dropping 0.59% to $13.40.