Woolworths boasts strong financial results

Woolworths Holdings Limited (WHL) was the second company to release its financial results for the year ended June 2016 this week. Earlier Shoprite Holdings Limited also released positive financial results for the past financial year.

Group sales for WHL increased by 16.4% to R72.1 billion despite challenging conditions in both South Africa and Australasia where the group has operations. In a statement released by WHL it noted that the Board has declared a final dividend of 180 cents per share, which provides a total dividend for the year of 313 cents per share, and increase of 26.7% from the previous financial year.

Ian Moir, WHL Group CEO said: “Our Group has performed well against difficult global and local economic conditions and an increasingly tough retail trading environment. This year’s performance demonstrates the continued benefits of our strategy to be the leading retailer in the Southern hemisphere. The transformation of David Jones continues to deliver and we are benefitting from the increased size and scale of the Group.”

The growth

According to WHL, Woolworths’ clothing and general merchandise sales grew by 8.2% and 4.4% respectively. Woolworths Food continued to gain market share, with its focus on quality, freshness and innovation.

WHL pointed out: “The Foods business has delivered growth ahead of the market every month since September 2011. With food inflation putting pressure on our customers and the recent drought in Southern Africa impacting supply and price of raw materials, we continued to invest in price and breadth so as to offer a complete shop at competitive prices.”

Furthermore, Woolworths Financial Services grew its debtor’s book by 8.1%. This is despite the impact of the new credit regulations under the NCCA. “The Financial Services offer was repositioned within the WRewards programme to deliver a simpler, richer programme and incentivise customers to use their WFS cards as tender. This has yielded encouraging results in a credit environment that remains under pressure. The book’s impairment rate was up slightly to 5.7%,” explained WHL.

Other brands with WHL, such as Country Road Group and David Jones also experience growth in both the South African and international market. Overall WHL has had a good financial year for the period of June 2015 to June 2016.