Strong second half helps Woolworths

Press, Volume CXVI, Issue 34087, 26 February 1976, Page 14

Strong second half helps Woolworths

(New Zealand Press Association—Copyright) SYDNEY. An exceptionally strong’ performance in the second half enable Woolworths, Ltd, to increase group net trading profit 44.1 per cent to $Au5t17,622,000 in the year to January 28.

The Sydney-based group achieved the result on sales! of more than slooom, making it the first retail organi-: sation in Australia to reach; this level in its financial! year.. i In conjunction with its I profit report yesterday,. Wool worths announced that; it was making a one-for-five; share issue at a premium of! (25c. This will raise $15.8m. i The group’s second-half earnings increased 58.2 per: cent to $12.5m. Profit in the] first six months rose 18.4 per cent to ss.lm. The reasons for the improved result included the success of the “Woolworths’i lower prices” advertising (campaign to secure an increased share of the market, said the chairman Mr Theo: Kelly. Costs had been tightly: i controlled, and had fallen as ■ a percentage of sales. Unprofitable or marginally! profitable stores were closed,, and other unprofitable activi- : ties eliminated, or brought (to profitability. Although Wool worths is! the first retailing group to make sales of slooom in its financial year — its sales: rose 23.4 per cent to slol9m — its main competitor, G. J. Coles and Company, Ltd.; reached this target in the (year to September 30, last, year. Pre-tax profit on every j (sales dollar rose from 2.6 c Ito 3c, and net profit from I 1.5 c to 1.7 c. The earning rate on share-: , holders.’ funds increased ; I from 11.6 per cent to 15.7

■per cent, and net tangible (asset backing rose from 94c a share to $1.02 a share. The profit was after providing s4m more for tax at $13.3m, $200,000 more for depreciation at sB.lm, but $400,000 less for interest at $4.2m.