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Woolworths Holdings announces results for 26 weeks to 27 December 2015

| Retailer trading results

Revenue increased by 17.1% to R35.5 billion (up 12.3% excluding David Jones) and pre-tax profit grew by 16.5% to R3.4 billion. Headline earnings per share grew by 30.6% to 251.7cps.

The directors have declared an interim cash dividend of 133.0 cents per share, which is an increase of 37.8% on the same period last year.
Clothing and General Merchandise had a much improved half, with sales growing 12.5% in South Africa and Clothing sales up 11.7%. Operating profit increased by 14.6%. These results are driven by a good performance from core womenswear and menswear categories and a strong improvement from kidswear.
The Food division once again delivered a strong performance, with sales up 12.1% and operating profit up by 17.6%.  The supermarket strategy is proving successful and Christmas sales were strong.
David Jones had a strong first half performance with improved merchandising and the expansion of the Group’s private label brands across the chain. Sales (including concession sales) grew by 11.2% on a 26-week basis, well ahead of both the Australian department store and specialty clothing market. Sales in comparable stores grew by 9.7%. Despite the inclusion this year of the clearance month of July, significant once-off costs associated with the launch of private label and other transformation projects, the contribution to profit across the Group from David Jones increased by 19%.
Country Road Group sales in Australasia grew by 13.4% and by 0.1% in comparable stores, despite a disappointing performance by Country Road womenswear. Operating profit increased by 5.2%, which includes the additional profit from the successful launch of Country Road Group brands into David Jones.
The Woolworths Financial Services debtors’ book grew by 7.8%, with an annualised impairment rate for the six months ended 31 December 2015 at 4.8% (six months ended 31 December 2014: 4.8%).
Commenting on the results, WHL Chief Executive Ian Moir said:
“We are pleased with this set of results. Despite the tough trading conditions, our businesses continue to perform well ahead of the market. There has been a strong turnaround in the South African Clothing business following corrective management action, and the transformation of David Jones continues to deliver the results we expected. Through our positioning as a leading Southern Hemisphere retailer, we are able to leverage our scale and global sourcing strategy to deliver quality products at competitive prices for our customers.”

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