JSE-listed meals, clothes and homeware retailer Woolworths has declared a final dividend of 149 cents, a 125.8% improve on that declared within the prior 12 months, boosted by an improved group buying and selling performance within the second half.
The up-market retailer on Wednesday additional famous a modest enchancment in group turnover and concession gross sales of 1.4% for its full-year to 26 June 2022, rising to R87 billion.
Supporting this was the 16.4% surge in on-line gross sales which contributed 12.4% to the group’s complete turnover and concession gross sales.
Headline earnings per share (Heps) grew by 6.5% to 398.9 cents this era, up from 398.9 cents within the prior interval.
The easing of lockdown restrictions throughout its operations in the course of the interval contributed considerably to creating a greater buying and selling atmosphere within the second half, serving to the group focus on executing its strategic targets, Woolworths mentioned.
The market appeared happy with the group’s elevated dividend, with the share worth of Woolworths up over 5% to R56.22 in morning commerce on Wednesday.
David Jones restoration
Despite registering a 2.6% decline in turnover and concession gross sales for the total 12 months, the group’s Australian clothes enterprise David Jones is displaying indicators of restoration, recoding development within the second half of its 2022 monetary 12 months. This follows intensive government-enforced Covid-19 associated lockdown restrictions battered the already struggling enterprise within the first half and prior monetary 12 months.
A stronger second half noticed the model rising turnover and concession gross sales 4.3% between January and June 2022 – development the group says was aided by the easing of lockdown restrictions.
Continuing the group’s efforts to assist within the enterprise’s restoration, Woolworths has, as a part of its “space optimisation” technique, lowered David Jones buying and selling area by an additional 2.6% this era.
“For the full year, adjusted operating profit declined by 0.6% on the prior year to A$83.7 million, returning an operating profit margin of 4.1%, compared to 4.0% in the prior year.”
“This was achieved despite Covid-19-related government support and rent concessions in the prior year base,” Woolworths mentioned.
Read: Woolworths prepares for inflation threat after upping dividend
Operational assessment
A discount of buying and selling area by 4.5% of its vogue, magnificence and homeware (FBH) in the course of the interval has, in response to the retailer, supported a double-digit improve in buying and selling densities for the phase.
The FBH enterprise has seen noticeable turnover enchancment with turnover and concession gross sales rising by 6.5%, this because the transfer again to the workplace intensifies in South Africa.
“Adjusted operating profit increased by 48.7% to R1 610 million, resulting in an operating margin of 11.9% for the year, compared to 8.4% in the prior year.”
Food nonetheless modest
The meals enterprise has maintained development this era – even when muted compared to different grocery retailers – reporting a 4.6% rise in turnover and concession gross sales within the second half of the 12 months .
Woolworths says the expansion of the meals enterprise this era must be seen within the context of the return to out-of-home consumption – an more and more aggressive atmosphere – in addition to the impression of the excessive base it noticed in prior years.
Like its opponents, the group has additionally reported managing worth will increase, holding product inflation throughout its key classes low to protect the patron from the rising value of residing.
“Price movement averaged 3.5% for the full year, with underlying product inflation at 3.9%, reflecting continued price investment.”
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Country Road
For its worldwide operations, Woolworths says stronger client demand in addition to the group’s focus on commerce noticed a “healthy rebound” in gross sales within the second half of the 12 months.
Unlike David Jones, the Country Road enterprise managed to develop its gross sales by 9% within the second half, leading to a full-year gross sales development of three.1%.
Woolworths says this enchancment was pushed primarily by a powerful performance from the Country Road, Trenery and Politix manufacturers which launched new ranges in the course of the interval.
However, the necessity to implement prolonged clearance gross sales in addition to authorities’s choice to increase lockdowns and better freight prices ensuing from persevering with world provide chain constraints has seen Country Road’s gross revenue margin declining by 130bps to 59.5%.
