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REPORTING SEASON: Woolworths Limited (WOW)

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Figure 1: Woolworths Limited 12 month chart

Australia’s biggest retailer by market value, Woolworths Limited (WOW), has increased its first half profit by 14.5% to $1.32 billion thanks to strong supermarket sales.

The result was largely in line with expectations, with total revenue from continuing operations rising 6% to $32 billion.

There were no significant items to factor in this half, unlike the prior period where the result was impacted by a write-down on the sale of its underperforming Dick Smith electronics business.

There was a 6.8% increase in Earnings before Income Tax (EBIT) for the group’s Food and Liquor business, which includes the Dan Murphy and BWS brands.

Petrol contributed $74 million to EBIT while the Masters Home Improvement business posted a $71.9 million loss in the half. Big W’s EBIT was $120.5M.

WOW admitted some of its businesses are continuing to experience challenging trading conditions, yet its strategy remains on track.

That strategy includes online retailing, with total online sales exceeding $1 billion in 2013, ahead of WOW’s FY14 target.

WOW also said it is on track to have 49 Masters stores open by year end. WOW today upgraded its FY14 guidance, expecting 5-7% NPAT growth up from previous guidance of 4-7%.

Shareholders will receive a fully franked interim dividend of 65 cents per share to be paid on April 24.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliette Saly, Market Analyst,