Woolworths unveils $1.7b shareholder cash splash

In a win for shareholders, Woolworths says it will return $1.7b to shareholders following the sale of its petrol stations. It comes as the supermarket giant regains ground over Coles, as the impact of the Little Shop promotion fades.

Woolworths unveils future cash slash following the sale of its petrol stations. Picture: AAP Image/Joel Carrett

Woolworths will return $1.7 billion to shareholders following the sale of its petrol stations as it regains the lead from Coles in the supermarket sales race.

Woolworths unveiled the future cash slash this morning as it announced net profit rose one per cent to $979 million for the 27 weeks ending December.

The profit haul was less than what analysts had been expecting and shares in the nation’s largest supermarket chain slumped by more than six per cent in early trade.

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Woolworths unveils future cash slash following the sale of its petrol stations. Photographer: Ian Waldie/Bloomberg

Total sales rose 2.5 per cent to $33.2 billion — just below the 2.6 per cent growth rate key rival Coles notched up in the half.

But Woolworths has overtaken Coles in the critical food space with like-for-like sales growing by 2.7 per cent in the final three months of the year.

That compares to like-for-like growth of 1.3 per cent at Coles for the same period as the impact of its Little Shop promotion faded.

Coles overtook Woolworths in the three months to September last year as it benefited from Little Shop and its decision to slow the phase out of free plastic bags.

Like-for-like sales are a closely-watched industry metric which strips out the impact of stores opening and closing.

“While the first half was below our financial expectations, we made progress in a number of important areas and are confident that if we remain focused on our key priorities, we will continue to transform our business for the benefit of all of our stakeholders,” Woolworths chief executive Brad Banducci said.

Woolworths raised its interim dividend 2 cents to 45 cents.

The supermarket chain announced in November it was selling its petrol business to British petrol retailer EG Group.

Originally published as Woolworths unveils $1.7b shareholder cash splash