Woolworths profits up 27.5 per cent, electronics sales up 10.6 per cent

By Martin Vedris

SYDNEY: Woolworths Limited today announced its financial results for the year to 24 June — highlights include a group net profit increase of 27.5 per cent to $1,294 million and a 10.1 per cent increase in consumer electronics sales to $1,285 million.

Other highlights for the group from the report released to the Australian Stock Exchange today include: sales from continuing operations up 12.6 per cent to $42.3 billion, earnings before interest and tax (EBIT) up 22.6 per cent to $2,111.3 million, earnings per share up 19.7 per cent and dividend per share up 25.4 per cent to 74 cents.

The group’s consumer electronics division, which comprises Dick Smith, Powerhouse and Tandy Electronics, reported double digit growth in both revenue and earnings. Sales for the full year in that division reached $1,285 million (a 10.1 per cent increase on 2006) with comparable store sales increasing by 6.4 per cent.

The Woolworths group reported that in consumer electronics it achieved strong unit sales growth and market share growth in a number of key categories, including flat panel TVs, portable PCs and DVD recorders.

According to the company report, consumers benefited from lower prices reflected by a reduction in gross margin, which was made possible by continued and significant reductions in the cost of doing business. The group also re-invested in new retail outlets.

During the year, 40 new Dick Smith Electronics, Powerhouse and Tandy stores were opened, with 13 of those being opened in the fourth quarter; taking the total number of stores to 400.

Woolworths reported that over the next two to three years it plans to open more than 20 consumer electronics stores per year in Australia and New Zealand.

Woolworths Limited CEO, Michael Luscombe said, “Overall this has been a successful year, with pleasing results in all our businesses.

“The development of our supermarkets’ supply chain is now complete, with the opening of our largest distribution centre (DC) in Brisbane in March 2007. The systems that have driven our supply chain transformation are fully functioning and continue to be refined to deliver real productivity improved in stock positions and cost benefits to the business.

“We are now leveraging our systems and knowledge in logistics into other business areas including Liquor, BIG W and in time New Zealand supermarket operations.”