24 August 2012
The Weekly

Category: Finance

South Africa

South African retailer Woolworths has booked an increase in full-year profits as the company benefited from share buy backs during the year. In the 12 months ended 24 June, earnings attributable to shareholders increased 25% to ZAR2.06bn (US$248m). Operating profit in the period increased 26.6% to ZAR2.69bn. sales climbed 12% to reach ZAR28.6bn. Woolworths' food division experienced "strong" growth for the year with sales up 11.9%, growing 1.3% ahead of the market. Increased margin together with good cost control resulted in segmental profit before tax growth of 35.5%. Woolworths sales grew by 11.6% and by 7.0% in comparable stores. Clothing and General Merchandise sales grew by 11.6% and by 5.8% in comparable stores. South African clothing and footwear sales grew at 12.6% and by 5.9% in comparable stores and General Merchandise sales increased by 7.0% and by 4.7% in comparable stores. Clothing and General Merchandise's gross margin increased 0.8% to 44.5% due to franchise conversions, which together with good cost control saw segmental profit before tax up 25% and return on sales (after excluding unrealised net foreign exchange gains) increased by 1.1% to 16.7%. During the year the group acquired a further 34 South African franchise stores at a cost of R405 mln. In total, 59 local stores have now been acquired at a cost of R580 mln and the remaining 16 will be acquired over the next 7 years as the franchise agreements expire.