Not a subscriber ?  Start your complimentary Premium trial now


Woolworths records fall in 1H17 operating profit, dividend

Nicholas Grove  |  22 Feb 2017Text size  Decrease  Increase  |  

Page 1 of 1

Woolworths' (ASX: WOW) net profit from continuing operations for the first half of fiscal 2017 fell 17 per cent on the same half in the prior year to $785.7 million, after the retail giant continued to invest in the transformation of its food business.

Group net profit for the half year stood at $725.3 million, a sharp turnaround from the $972.7-million loss in the previous corresponding half, which included write-downs related to the company's exit from the Masters home improvement business.

Basic earnings per share from continuing operations stood at 61.3 cents, down 18.0 per cent, Woolworths said in a statement to the ASX.

Sales from continuing operations rose 2.6 per cent year over year to just over $29 billion.

The company declared a half-year dividend of 34 cents, down 22.7 per cent on the prior corresponding half. The dividend will be paid on 7 April 2017 to shareholders on record as at 3 March 2017.

CEO Brad Banducci said Woolworths had made good progress on its key priorities during the half, and he was particularly pleased with the improvement in sales momentum in the Australian Food division, especially in the second quarter.

"This is on the back of strong voice-of-customer scores and is underpinned by continued growth in customer transactions and, more recently, items per basket," he said.

"This momentum gives us confidence that, while we still have a lot to do, we are on the right track."

Banducci said the Endeavour Drinks, New Zealand Food and ALH Hotels divisions also all delivered solid sales growth in the second quarter.

In December 2016, the company agreed to sell its 527 Woolworths-owned fuel convenience sites and 16 committed development sites to BP for $1.785 billion. Consequently, its Petrol business has been classified as a discontinued operation.

However, BIG W reported a loss before interest and tax of $27.2 million in the half, and Banducci said the company is currently reviewing its BIG W strategic plan, which he expects will be completed in the next few months.

Looking forward, Banducci said that with the exception of BIG W, Woolworths expects to see further progress on key priorities in the second half as the company looks to restore sustainable growth.

"However, we still have a long way to go," he said.

"In the second half, we will continue to invest in improving the shopping experience and expect higher depreciation and team incentive payments."

"We continue to be vigilant about the competitive environment for all of our businesses."

More from Morningstar

• BHP Billiton witnesses massive turnaround

• Oil Search back in black but still under pressure


Nicholas Grove is a Morningstar journalist.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

Uncover winning investment ideas and strengthen your portfolio with a 4-week free trial to Premium:

  • Your Money Weekly Newsletter
  • Independent Fund Analyst Research
  • Portfolio X-Ray
  • Investment Picks
* only available to new subscribers