Woolworths half-year profit up 37.6 per cent

WOOLWORTHS has delivered a massive profit for the first half as it continues to smash rival Coles in sales growth.

WOOLWORTHS has reported a 37.6 per cent jump in first-half profit to $969 million off the back of continued strong sales growth at its core supermarket business.

Comparable food sales in the first six months of the financial year rose 4.9 per cent on the prior corresponding period — compared with growth of just 0.9 per cent at key competitor Coles — with the Australian food division booking an 11.1 per cent increase in before-tax earnings to $901 million.

Dan Murphy’s, BWS and Woolworths’ hotel businesses also performed strongly, but the struggling Big W department store chain posted a loss of $10 million in the first half of the year, compared with a $27 million loss in the prior corresponding period.

“At the end of FY17 we said that we were moving from turnaroud to transformation,” Woolworths Group chief executive Brad Banducci said in a statement. “In the current half we have seen some early signs of this transformation with good progress on a number of strategic initiatives and pleasing sales growth from all of our businesses.”

Mr Banducci said Big W’s sales performance had improved in the half but with more modest growth in the second quarter. He said a focus on lowering prices had driven higher volumes but profit was largely unchanged due to lower average selling prices.

Woolworths expects the full-year loss for Big W to be between $80 million to $120 million, compared with a loss of $150.5 million in 2017. The company will pay a full franked interim dividend of 43 cents per share, an increase of more than 25 per cent.

Mr Banducci said Australian food sales may slow in the second half of the year, with comparable sales growth in the first seven weeks tracking at 3.7 per cent.

[e-mail]