Retailer Woolworths on Thursday (25 February) reported sturdy progress in its meals division for the 26 weeks ended 27 December 2020, with improved buying and selling momentum throughout all companies over the ultimate six weeks of the reporting interval.
Group gross sales for the interval elevated by 5.3% in comparison with the 26 weeks ended 29 December 2019, however declined by 0.5% in fixed forex phrases.
“South Africa’s weak macro setting and shopper confidence has been additional exacerbated by the second wave of Covid-19, putting additional pressure on shopper discretionary spend,” it stated.
- Turnover +5.8% to R39.6 billion
- Turnover and concession gross sales +5.3% to R43.0 billion
- Revenue earlier than tax +66.2% to R3.6 billion
- Adjusted revenue earlier than tax +24.6% to R2.7 billion
- Headline earnings per share +58.3% to 261.1 cps
- Adjusted diluted headline earnings per share +19.4% to 193.7 cps
Woolworths Meals delivered additional quantity and market share features, “pushed by innovation, comfort and the centered worth funding technique,” the group stated.
Gross sales over the 26-week interval grew by 10.9% and by 9.4% in comparable shops, with internet area progress of 0.4%. On-line gross sales grew by 158.5%, contributing 2.2% to gross sales, with the enlargement of supply choices.
Worth motion was 7.1%, impacted by combine, whereas underlying product inflation averaged 4.8% over the interval, it stated.
Adjusted working revenue elevated by 23.2% to R1 531 million, returning an working margin of 8.2% for the half.
Style, magnificence and residential
Woolworths stated that whereas FBH commenced the repositioning of its trend enterprise, efficiency stays disappointing, with gross sales declining by 11.2% over the interval, and comparable retailer gross sales 11.0% decrease on a 2.4% worth motion.
On-line gross sales grew by 118.8%, contributing 4.0% to South African gross sales. Web area was decreased by 1.9%, in keeping with its concentrate on enhancing retailer working effectivity, it stated.
Gross revenue margin decreased by 0.7% to 45.9% because of elevated promotions and worth funding, along with greater clearance in December. Bills have been nicely managed, declining by 1.6%, however extra Covid-19 associated prices.
Adjusted working revenue decreased by 39.9% to R582 million, leading to an working margin of 9.1% for the half.
The WFS ebook mirrored year-on-year contraction of two.2% on the finish of December 2020. The annualised impairment charge for the six months ended December 2020 was 4.1%, in comparison with 3.3% for the prior comparable interval.
Trying forward, Woolworths stated that the buying and selling setting is difficult and unsure and is anticipated to stay so all through the second half of the yr.
“The financial outlook for South Africa is bleak, with the patron underneath important pressure, and the opportunity of additional waves of an infection and delays within the rollout of vaccines prone to additional exacerbate the stress on discretionary spend.”
“While we’re happy with among the progress that we now have made to this point, we stay steadfastly centered on the opposite parts of our strategic priorities, together with the repositioning of FBH, sustaining our management place in Meals, our actual property optimisation efforts in David Jones and driving progress by digital, on-line and information,” it stated.
The corporate determined towards an interim dividend given the uncertainty round Covid-19.