FY14 Key Financial Highlights - Continuing Operations Before Significant Items1
Woolworths Limited Chief Executive Officer, Grant O'Brien said: “We are pleased to report growth in net profit after tax from continuing operations before significant items1 of 4.2% or 6.1% on a normalised 52 week basis2 for FY14.
“The result demonstrates that the four Strategic Priorities we outlined three years ago are delivering strong, sustainable growth in established parts of the business. At the same time we are investing in opportunities to generate growth into the future.
“Ongoing momentum achieved in FY14 was underpinned by growth in Australian Food, Liquor and Petrol as part of the first Strategic Priority to extend our leadership in Food and Liquor. We have increased comparable sales and EBIT growth in Australian Food and Liquor over the past three years, gaining further momentum in FY14.
“We have reinforced our position as Australia's leading supermarket, providing customers with the first choice for Fresh food, excellent value and the greatest access across all channels. In a highly competitive market with ongoing consumer uncertainty, we have increased market share whilst also delivering value to customers who have saved more than $750 million from key promotional campaigns throughout the year and benefited from deflation in average prices of 3.1% for the year.
“Liquor delivered strong growth across the three formats of Dan Murphy's (Destination), BWS (Convenience) and The Wine Quarter (Online and Direct). Dan Murphy's remains Australia's premier liquor destination and most visited liquor website.
“Countdown Supermarkets delivered a pleasing result despite the subdued New Zealand grocery market conditions. The transformation of this business is well underway with its focus on delivering enhanced value to customers, most notably via the 'Price Lockdown' campaign which has resonated strongly with customers.
“We have continued our focus on maintaining our track record of building new growth businesses. Our Online sales were over $1.2 billion for FY14, increasing by 50% on the previous year, reinforcing our market leadership as Australasia's largest domestic online retailer.
“Our market leading Online offers in Australian Food, Australian Liquor as well as Food in New Zealand continue to exceed our expectations and have been supported by strong growth in our Australasian Apparel business. Recently, we opened Australia's first full range dedicated online fulfilment grocery store and implemented 'Track My Order' GPS functionality for Supermarket online orders, improving convenience for our customers.
“As previously outlined, our Home Improvement business is focused on moving from the start-up phase to a scalable, profitable business where it will become a material profit contributor for the Group.
“We continue to put in place the enablers for a new era of growth. We have commenced Mercury II to drive the next phase of supply chain enhancements and our 50% ownership of Quantium is allowing us to use data to better tailor the shopping experience to the needs of our customers. We also continue to strengthen our world class retail team, with recent appointments including David Marr as Chief Financial Officer, Clive Whincup as Chief Information Officer as well as Managing Director appointments of Matt Tyson (Home Improvement) and Alistair McGeorge (BIG W).
“We have also continued to act on our portfolio to maximise shareholder value and are currently considering the divestment of a portfolio of freehold Hotel sites which would further the work undertaken in FY13, including the creation of the SCA Property Group.
“Despite making good progress with the previously advised transformation of our BIG W business, this transformation together with challenging trading conditions, impacted our profitability leading to a disappointing result. We have made a number of recent appointments to the BIG W leadership team and under Alistair's leadership, they will continue to develop the BIG W strategy whilst also bringing a strong focus on execution and operational excellence. The integration of EziBuy is progressing well and we are excited by the future potential for this business.
“Hotels delivered a pleasing result despite regulatory changes and subdued trading conditions in Victoria and Queensland where the majority of hotel sites are located. We continued to deliver the initiatives that reinforce our focus on being Australia's most responsible hotel operator.
“In summary, having served on average 29.4 million customers per week across the Group, we are pleased with the progress we are making on our four Strategic Priorities particularly in our core Food and Liquor business as well as our future growth businesses such as Online. However, there is still work to do, particularly in General Merchandise and Home Improvement.”
Woolworths Limited Chairman, Ralph Waters, said: “The Board has announced FY14 dividends of 137 cents per share, up from 133 cents in the prior year. The FY14 result is pleasing and reflects the ongoing ability of this great company to reward both its customers and its shareholders, and I am confident it will continue to do this into the future.”
Note: This announcement contains certain non-IFRS measures that Woolworths believes are relevant and appropriate to understanding its business. Refer to Appendix One for further information.
The complete announcement and presentation are available to download below.