Woolworths Increases Profits

Monday, March 3, 2014

Even though some categories had a difficult time establishing momentum during the second half of the year just past, overall, Woolworths Limited managed quite respectable sales and profit figures.

Compared to the same period last year, the corporation as a whole posted a 3.8 percent improvement in terms of sales, bringing in total revenues of 31.8 billion, which resulted in net profits of $1.3 billion, almost 15 percent greater than for the same period last year.

Food and liquor sales continue to be the strongest category for Woolworths. That segment posted an increase of 6.8 percent in earnings prior to tax and interest calculations. The Hotels unit is also experiencing rapid growth, showing a gain of 16.4 percent to almost $165 million prior to taxes and interest.

Interesting, at least from a percentage vantage point, is that the 6.8 percent growth in food and liquor was essentially matched by a corresponding 6.9 percent drop in the General Merchandise category. Whilst still profitable, the difficulty experienced by Masters losses of almost $72 million dampened the good news of $7.5 million in profits posted by the Home Timber and Hardware division.

Across the Tasman Sea, New Zealand operations of Woolworths contributed to the plus column with second half growth of nearly 10 percent on pre-tax and interest revenues of approximately $137 million.

A company spokesman for Woolworths painted a positive outlook for the immediate future, pointing to advantageous positioning in its market segments and a robust business model. The company is predicting growth in the four to seven percent range for 2014 in terms of net profit.

Continued growth by such respectable numbers bodes well for the economy in general, as the retail sector accounts for a large percentage of the GDP for Australia, New Zealand and any developed countries with mature economies.