Countdown chain lifts earnings 3.5%

WOOLWORTH'S Countdown supermarkets have increased profit and sales despite "increasingly challenging" retail trading conditions.

AUSTRALIAN supermarket chain Woolworths lifted annual earnings at its New Zealand Countdown stores by 3.5 per cent as it grabbed market share in a "challenging" trading environment.

Normalised earnings before interest and tax, which strips out an extra week of trading in the 2013 year, rose to $302.7 million in the 12 months ended June 30 from $287.4m a year earlier, the Sydney-based company said in a statement on Wednesday.

Earnings were dragged down by a $7.7m charge for extra rental costs after the group spun off its real estate assets into SCA Property Group.

Normalised sales climbed 2.3 per cent to $5.75 billion, opening eight new stores in the year and closing three.

"This is a solid result given the New Zealand retail environment has been characterised by low growth and low inflation with retail trading conditions increasingly challenging during the year," the company said.

Government figures earlier this month showed New Zealand retail spending on supermarket and grocery items increased 0.4 per cent to $16.81 billion in the 12 months ended June 30 from a year earlier.

Woolworths lifted group profit 24 per cent to $A2.26 billion ($NZ2.61b) on sales of $A59.16b, as it came from a lower base when it wore a $A383.7m impairment charge on the now divested Dick Smith Electronics unit.

Last week the Australian company bought New Zealand apparel and homeware retailer EziBuy for $350m in a deal it expects will act as a launching pad for Woolworths' next growth phase, leveraging on its direct marketing via online and catalogue sales.