Woolworths beats full-year earnings expectations
WOOLWORTHS Holdings slightly beat forecasts with a 24.2% rise in full-year profit on Thursday, helped by share buybacks and resilient demand for its upscale grocery products.
Woolworths said diluted headline earnings per share totalled 260.6c, beating a 258.7c estimate in a Reuters poll of 12 analysts.
The company declared a dividend 123c for the year, taking the total distribution to 198c, a 38% increase from the dividend in 2011.
Woolworths said it bought back shares worth R286m during the year. The company also bought back R358m of shares to settle employee schemes.
The Cape Town-based company said sales increased 12% to R28.6bn, with its grocery unit lifting sales by a similar margin.
The group purchased 34 South African franchise stores for R405m.
"In total, 59 local stores have now been acquired at a cost of R580m and the remaining 16 will be acquired over the next seven years as the franchise agreements expire," Woolworths said on Thursday.
"In the rest of Africa we pursued our aim of converting from a franchise model and entered into a range of wholly owned or joint venture arrangements across eight countries."
Sales at Woolworths’ Australian franchise, Country Road, declined 2.6% for the same period, due to difficult trading conditions in the country.
Shares in Woolworths are up about 44% so far this year, reflecting a buying frenzy across the sector on expectations of healthy returns from its expansion drive into the rest of the continent.
The company gave an upbeat outlook for both its South African and Australian operations.
"We expect the upper end of the (South African) market to remain resilient while the economy as whole remains subdued," it said.
Reuters, with Roy Downing
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