Woolworths Holdings Ltd (WHL) today announced results for the 26 weeks to 27 December 2015.
Revenue increased by 17.1% to R35.5 billion (up 12.3% excluding David Jones) and pre-tax profit grew by 16.5% to R3.4 billion. Headline earnings per share grew by 30.6% to 251.7cps. The directors have declared an interim cash dividend of 133.0 cents per share, which is an increase of 37.8% on the same period last year.
Clothing and General Merchandise had a much improved half, with sales growing 12.5% in South Africa and Clothing sales up 11.7%. Operating profit increased by 14.6%. These results are driven by a good performance from core womenswear and menswear categories and a strong improvement from kidswear.
The Food division once again delivered a strong performance, with sales up 12.1% and operating profit up by 17.6%. The supermarket strategy is proving successful and Christmas sales were strong.
David Jones had a strong first half performance with improved merchandising and the expansion of the Group’s private label brands across the chain. Sales (including concession sales) grew by 11.2% on a 26-week basis, well ahead of both the Australian department store and specialty clothing market. Sales in comparable stores grew by 9.7%. Despite the inclusion this year of the clearance month of July, significant once-off costs associated with the launch of private label and other transformation projects, the contribution to profit across the Group from David Jones increased by 19%.
Country Road Group sales in Australasia grew by 13.4% and by 0.1% in comparable stores, despite a disappointing performance by Country Road womenswear. Operating profit increased by 5.2%, which includes the additional profit from the successful launch of Country Road Group brands into David Jones.
The Woolworths Financial Services debtors’ book grew by 7.8%, with an annualised impairment rate for the six months ended 31 December 2015 at 4.8% (six months ended 31 December 2014: 4.8%).
Commenting on the results, WHL Chief Executive Ian Moir said:
“We are pleased with this set of results. Despite the tough trading conditions, our businesses continue to perform well ahead of the market. There has been a strong turnaround in the South African Clothing business following corrective management action, and the transformation of David Jones continues to deliver the results we expected. Through our positioning as a leading Southern Hemisphere retailer, we are able to leverage our scale and global sourcing strategy to deliver quality products at competitive prices for our customers.”
Economic conditions are expected to become tougher, particularly in South Africa where interest rates are also likely to increase. Australian consumer confidence remains muted, with the local economy impacted by the slowdown in China.
Trading for the first six weeks in the second half of the financial year has however remained robust.
For media enquiries contact:
Woolworths Press Office
+27 82 782 3856
+27 21 407 7700
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