By Terri-Ann Brouwers.
Woolworths Holdings Limited has released its audited financial results for the 53 weeks ended 30 June 2024, revealing a mixed performance across its operations.
The company reported turnover from continuing operations of R75.2 billion, a 4% increase from the previous year. However, total group turnover, including the now-divested David Jones, decreased by 10.7% to R76.5 billion. The adjusted profit before tax for the group fell by 29.3% to R4.6 billion, while headline earnings per share dropped by 29.2% to 364.2 cents.
Woolworths attributed these mixed results to a challenging trading environment, particularly in Australia, where rising interest rates and higher living costs have dampened consumer confidence. In South Africa, the business faced disruptions due to port congestion, taxi strikes, and the Avian flu outbreak.
The group has also declared a final gross cash dividend of 117.5 cents per ordinary share for the period, reflecting a 23.9% decrease from the previous year’s final dividend. This brings the total dividend for the year to 265.5 cents, down 15.2% from the prior year.
Woolworths Food and Woolworths FBH
Woolworths Food demonstrated robust performance, achieving market-leading like-for-like sales growth. For the 52-week comparable period, turnover and concession sales grew by 9.0%, with a 6.9% increase on a comparable store basis. The second half of the financial year saw sales growth of 9.6%, including contributions from the Absolute Pets acquisition. Even after adjusting for this acquisition, sales increased by 8.5%, indicating solid underlying momentum and market share gains. Notably, online sales surged by 52.8%, driven by the success of Woolies Dash, which saw over 70% growth. Gross profit margins improved, and despite rising operating expenses due to new initiatives, adjusted operating profit grew by 12.3%, reaching R3.3 billion.
In contrast, Woolworths Fashion, Beauty, and Home (FBH) faced challenges during the same period, with turnover and concession sales declining by 0.4%. The weak macroeconomic environment, supply chain issues, and heightened competition from international online retailers contributed to this decline. In the second half of the year, sales growth dropped by 2.9%, further impacted by delayed seasonal demand. Despite these hurdles, the division managed to improve its gross profit margin to 48.5%, supported by a focus on full-price sales. However, adjusted operating profit decreased by 9.9% to R1.8 billion, reflecting the ongoing pressure on the segment’s performance.
Changes to the board
David Kneale, a long-serving member of the board and chair of several key committees, will retire on 30 September 2024. The company has appointed Rob Collins as the new chair of the risk, information and technology committee and Hubert Brody as interim chair of the remuneration committee.
Woolworths also announced the appointment of Itumeleng Kgaboesele and Dr Nolulamo Gwagwa as independent non-executive directors. Kgaboesele, the founder and CEO of Sphere Holdings, will join the board on 5 September 2024, while Gwagwa, who holds multiple leadership roles, including board chair positions at Barloworld Limited and FirstRand Foundation, will join on 1 November 2024.
Woolworths also confirmed the extension of Group CEO Roy Bagattini’s contract with no specified end date.