Woolworths’ retail business returns to profitability

Adjusted profit at its retail business in the year to February 2 was£3.4 million, compared with a loss of£12.9 million for the previous year.

Retail like-for-likes were down 3.2 per cent, which reflected Woolworths’ decision to not chase unprofitable sales, as well as a slump in voucher redemption sales, following the Farepak fiasco in 2006, it said in a statement.

The retailer said its Worthit! entry price point range had achieved higher sales than anticipated and it will launch a range of 2,200 products branded “Woolworths” this year, positioned above Worthit!

Woolworths’ multichannel sales were up 5.2 per cent, while sales at its Entertainment Wholesale (EUK) business were up 36.6 per cent to£1.18 billion.

The retailer will further simplify its store portfolio, reducing skus, footprint and costs, and also plans to build on EUK’s customer and product base.

Total group revenue was up 8.5 per cent at£2.97 billion during the period and adjusted profit was up 30 per cent at£28.3 million.

Profit before tax after exceptional items was£11.7 million, down from£16 million the year before.

Woolworths cut its dividend and the board is recommending a final dividend of 0.17p a share.

Woolworths chief executive Trevor Bish-Jones said: “While like-for-like sales are up against last year, the much earlier Easter makes the like-for-like comparisons meaningless. It is early days and the retail environment is likely to remain challenging in the current year. We will, therefore, continue to manage the business tightly.”