Woolworths profit up 8.5 per cent to $2.45 billion

WOOLWORTHS has been raking in the dough. The supermarket giant posted an 8.5 per cent increase in profit to $2.45 billion.

Sales were up 3.9 per cent to $60.8 billion.

WOOLWORTHS has lifted its profit 8.5 per cent and expects a moderate increase for the year ahead.

The retail giant made a net profit of $2.45 billion for the year to June 30, up from $2.259 billion the previous year.

Sales were up 3.9 per cent to $60.8 billion during the year, though the full year results were skewed slightly by the fact Woolworths reported a 53 week-year in 2012/13.

Excluding the impact of that extra week, sales were up 5.9 per cent while underlying net profit was up 6.1 per cent.

Woolworths warned it expected trading conditions to remain challenging in 2014/15 with cost-of-living pressures and economic uncertainty continuing to weigh on consumers.

It expects to lift its 2014/15 profit by between four and seven per cent.

Chief executive Grant O’Brien said the company lifted sales and earnings from its core supermarket division despite a slide in grocery prices.

CEO Grant O'Brien said the company’s liquor retailing business also posted strong growth.

“We have increased comparable sales and EBIT growth in Australian Food and Liquor over the past three years, gaining further momentum in FY14,” he said.

“In a highly competitive market with ongoing consumer uncertainty, we have increased market share while also delivering value to customers who have saved more than $750 million from key promotional campaigns throughout the year and benefited from deflation in average prices of 3.1 per cent for the year.

Mr O’Brien said the company’s liquor retailing businesses, which include Dan Murphy’s, BWS and online seller The Wine Quarter, also recorded strong growth.

Earnings from Woolworths’ Australian Food, Liquor and Petrol division rose 7.2 per cent during the year on a normalised basis. But the home improvement division continued to drag, posting a loss of $169 million for the year due to the roll out of the Master’s business.

BIG W also recorded another tough year, with normalised earnings down nearly 19 per cent.

Woolworths announced a fully-franked final dividend of 72 cents, up from 71 cents a year ago.