Wednesday, August 17, 2022

Woolworths reports strongest balance sheet in eight years

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Woolworths’ turnover declined by 1% to R39.2 billion and its headline earnings per share fell by 35.6% to 168.2 cents, despite its strong balance sheet. Picture: File

Woolworths has reported its strongest balance sheet in eight years despite a decline in performance. 

In a statement on the release of its results interim results for the 26 weeks ended 26 December 2021, Woolworths CEO Roy Bagattini said the group reduced its debt by R7 billion in the past year. This has resulted in a net cash position of R258 million for the retailer, and the strongest balance sheet since 2014.

“I’m very excited by our runway for profitable growth, and the opportunities we see to invest in our diverse businesses. We are on track to rebuild our financial credentials, drive long-term value creation, and restore our business to its rightful place in the hearts and minds of all our stakeholders,” he said on Wednesday.

However, the group’s turnover declined by 1% to R39.2 billion and its headline earnings per share fell by 35.6% to 168.2 cents.

Online sales had a 22.4% boost and contributed 13.7% to Woolworth’s total turnover and concession sales in the 26 weeks. The group’s sales in the interim’s last six weeks grew by 3%.

Woolworths’ food business increased its turnover by 3.8% and its concession sales by 5.8% in the last six weeks of the reporting period. Its online sales grew by 55.8%.

Turnover and concession sales at Woolworths’ Fashion Beauty and Home business increased by 4.2% and 4.7% respectively. But growth was affected by a decline in footprint, brand and range rationalising, summer clearance timing and the underperformance of some womenswear categories. 

At David Jones, turnover declined by 9.2% and concession sales by 9% in the half year. Online sales grew by 44.2% and the group reduced the brand’s trading space by 5.8%. 

Country Road saw a sales decline of 3.1% and an increase in online sales of 3.6%.

The company declared an interim dividend of 80.5 cents for the 26 weeks.

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