While Woolworths Limited saw a strong rise in its traditional supermarket revenues in the past six months, its hotel and poker machine interests delivered remarkably strong increases.
Woolworths’ ALH Group saw revenues jump more than 19 per cent to $759 million for the half, whilst earnings before interest and tax (EBIT) increased more than 21 per cent to $141 million. The increase was driven by pub acquisitions and changes to Victorian gaming regulations. ALH is now said to operate more than 33% of the poker machines in Victoria’s pubs, 4677 machines, about the maximum allowed under current licensing arrangements.
Overall, Woolworths made a net profit after tax from continuing operations before significant items of $1,247.2 million, up 5.5%. Net profit after tax was also up, 19.4% to $1,154.8 million.
Woolworths chief executive officer and managing director Grant O’Brien said: “This result is a reflection of the sharpened focus on our core businesses. We have grown both sales and profits by pursuing a customer led strategy.
“We report a pleasing increase in net profit after tax from continuing operations before significant items of 5.5%. Growth in trading EBIT from continuing operations of 7.0% before significant items, central overheads and the investment in Home Improvement reflects the good momentum generated across our businesses during the first half of the financial year.
“Despite ongoing challenging retail conditions as well as the transformational path our business is pursuing, growth in profitability in our core businesses was strong. Our strategic initiatives, which are providing a platform for the future success of Woolworths, continue to generate enhanced returns for our shareholders whilst improving the shopping experience of our customers.
“We are closer to our customers than ever before and have a deep understanding of their needs and drivers. This will help us to continue to achieve the win/win outcome for customers, suppliers and shareholders of lowering prices, improving quality and delivering sustainable profit growth.”
Of the other businesses, Big W earnings were up eight per cent to $129.5 million, as a result of freight and storage cost savings and a changed approach to promotions, Woolworths said.
The Lowes joint venture Masters Home Improvement now has 25 stores, and generated sales of $637 million in the six-month period.
