2006/02/16
Woolworths - Unaudited Group Results For The Twenty-Six Weeks Ended December [JSE Securities Exchange - SENS]
 
             2005
Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1929/001986/06
Share code: WHL     ISIN: ZAE000063863
("Woolworths" or "the company")
UNAUDITED GROUP RESULTS FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 2005
HIGHLIGHTS
* Revenue up 16.7%
* Operating profit up    19.6%
* HEPS up     19.6%
* Dividend per
* share up    29.7%
* ROE up to   37.2%
Income statement
                                                                 Year ended
                                                               30 June 2005
                                                                   Restated
                                                                         Rm
Revenue                                                            12 988.9
Turnover                                                           12 220.7
Cost of merchandise                                                 8 207.6
Gross profit                                                        4 013.1
Other revenue                                                         768.2
Expenses                                                            3 550.0
Depreciation                                                          254.5
Occupancy cost                                                        609.8
Employment cost                                                     1 460.0
Other operating cost                                                1 225.7
Operating profit                                                    1 231.3
Finance costs                                                         152.7
Net profit before tax                                               1 078.6
Tax                                                                   299.5
Net profit after tax                                                  779.1
Attributable to:
Ordinary shareholders                                                 776.9
Outside shareholders                                                    2.2
Reconciliation of headline earnings
Attributable earnings                                                 776.9
(Profit)/loss on disposal of property, plant
and equipment net of outside shareholders' interest                     0.9
Profit on disposal of investment in unit trust                        (7.9)
Reversal of provision for impairment of property                     (15.5)
Provision for impairment of plant and equipment                         0.5
Foreign exchange loss realised on repayment of loan
by subsidiary                                                           4.1
Headline earnings                                                     759.0
Headline earnings per share (cents)                                    89.4
Earnings per share (cents)                                             91.5
Diluted headline earnings per share (cents)                            87.3
21.8%
Diluted earnings per share (cents)                                     89.4
Distribution per share (cents)                                         54.0
Distribution cover (based on earnings per share)                        1.7
Number of shares in issue (millions)                                  787.2
Weighted average number of shares in issue (millions)                 849.4
GROUP ANALYSIS
Revenue
Turnover                                                           12 220.7
Woolworths                                                         11 238.6
- Clothing and home                                                 5 349.5
- Food                                                              5 666.0
- Logistics services and other                                        223.1
Country Road                                                          982.1
Interest                                                              641.7
Other revenue                                                         126.5
                                                                   12 988.9
Operating profit
Woolworths                                                          1 206.9
Country Road                                                           24.4
                                                                    1 231.3
                                                  26 weeks ended
                                                    December
                                                    Restated
                                                2005        2004          %
                                  Notes           Rm          Rm     Change
Revenue                                      7 415.3     6 353.1      16.7%
Turnover                                     6 995.0     6 016.6      16.3%
Cost of merchandise                          4 710.1     4 036.0      16.7%
Gross profit                                 2 284.9     1 980.6      15.4%
Other revenue                                  420.3       336.5      24.9%
Expenses                                     1 974.9     1 706.7      15.7%
Depreciation                                   132.9       123.6       7.5%
Occupancy cost                                 337.2       302.3      11.5%
Employment cost                                805.1       705.4      14.1%
Other operating cost                           699.7       575.4      21.6%
Operating profit                               730.3       610.4      19.6%
Finance costs                                  113.8        62.0      83.5%
Net profit before tax                          616.5       548.4      12.4%
Tax                                    3       194.2       161.0      20.6%
Net profit after tax                           422.3       387.4       9.0%
Attributable to:
Ordinary shareholders                          421.3       386.7       8.9%
Outside shareholders                             1.0         0.7      42.9%
Reconciliation of headline earnings
Attributable earnings                          421.3       386.7       8.9%
(Profit)/loss on disposal of
property, plant
and equipment net of outside
shareholders' interest                                     (2.2)      (0.6)
Profit on disposal of investment in
unit trust                                                     -          -
Reversal of provision for
impairment of property                                         -          -
Provision for impairment of plant
and equipment                                                  -          -
Foreign exchange loss realised on
repayment of loan
by subsidiary                                      -           -
Headline earnings                              419.1       386.1       8.5%
Headline earnings per share (cents)             53.1        44.4      19.6%
Earnings per share (cents)                      53.3        44.5      19.8%
Diluted headline earnings per share
(cents)                                4                    51.9       42.6
Diluted earnings per share (cents)     4        52.2        42.7      22.2%
Distribution per share (cents)                  24.0        18.5      29.7%
Distribution cover (based on
earnings per share)                                          2.2        2.4
Number of shares in issue (millions)           796.2       870.7     (8.6%)
Weighted average number of shares
in issue (millions)                            789.8       869.7     (9.2%)
GROUP ANALYSIS
Revenue
Turnover                                     6 995.0     6 016.6      16.3%
Woolworths                                   6 488.9     5 546.0      17.0%
- Clothing and home                          3 024.4     2 685.6      12.6%
- Food                                       3 329.1     2 753.1      20.9%
- Logistics services and other                 135.4       107.3      26.2%
Country Road                                   506.1       470.6       7.5%
Interest                                       348.6       288.6      20.8%
Other revenue                                   71.7        47.9      49.7%
                                             7 415.3     6 353.1      16.7%
Operating profit
Woolworths                                     720.1       602.4      19.5%
Country Road                                    10.2         8.0      27.5%
                                               730.3       610.4      19.6%
Balance sheet
                                                                      As at
                                                               30 June 2005
                                                                   Restated
                                                                         Rm
ASSETS
Non-current assets                                                  2 002.0
Property, plant and equipment                                       1 304.0
Investment property                                                    72.2
Investments                                                             2.6
Loans to customers                                                    203.9
Participation in export partnerships                                   79.3
Other loans                                                           146.9
Deferred tax                                                          193.1
Current assets                                                      5 137.1
Inventories                                                           683.0
Woolworths card debtors                                             2 590.8
Credit card receivables                                               309.6
Accounts receivable                                                   788.4
Loans to customers                                                    539.8
Cash                                                                  225.5
Total assets                                                        7 139.1
EQUITY AND LIABILITIES
Capital and reserves                                                2 210.9
Ordinary shareholders' interest                                     2 184.7
Outside shareholders' interest                                         26.2
Non-current liabilities                                             3 088.7
Interest-bearing borrowings                                         2 400.0
Operating lease accrual                                               417.3
Post-retirement medical aid liability                                 181.3
Deferred tax                                                           90.1
Current liabilities                                                 1 839.5
Accounts payable                                                    1 519.8
Provisions                                                            117.5
Interest-bearing borrowings                                           202.2
Total equity and liabilities                                        7 139.1
Net asset book value - per share (cents)                              277.5
GROUP ANALYSIS
Total assets                                                        7 139.1
Woolworths                                                          6 754.4
Country Road                                                          384.7
Inventories                                                           683.0
Woolworths                                                            563.0
Country Road                                                          120.0
Approved commitments for capital
expenditure                                                           643.2
Woolworths                                                            598.2
Country Road                                                           45.0
                                                                    As at
                                                                  December
                                                                 Restated
                                                           2005        2004
                                                             Rm          Rm
ASSETS
Non-current assets                                      2 190.9     1 998.8
Property, plant and equipment                           1 421.2     1 262.4
Investment property                                        72.2        56.7
Investments                                                 2.6        24.2
Loans to customers                                        228.6       192.8
Participation in export partnerships                       62.4       164.4
Other loans                                               191.7       164.7
Deferred tax                                              212.2       133.6
Current assets                                          5 808.4     4 772.6
Inventories                                               865.7       801.4
Woolworths card debtors                                 2 788.7     2 466.1
Credit card receivables                                   405.5       233.7
Accounts receivable                                       877.9       604.7
Loans to customers                                        587.8       495.8
Cash                                                      282.8       170.9
Total assets                                            7 999.3     6 771.4
EQUITY AND LIABILITIES
Capital and reserves                                    2 343.3     2 914.9
Ordinary shareholders' interest                         2 316.2     2 893.9
Outside shareholders' interest                             27.1        21.0
Non-current liabilities                                 3 098.6     1 209.3
Interest-bearing borrowings                             2 400.0       500.0
Operating lease accrual                                   428.3       404.1
Post-retirement medical aid liability                     193.2       169.5
Deferred tax                                               77.1       135.7
Current liabilities                                     2 557.4     2 647.2
Accounts payable                                        1 969.1     1 523.3
Provisions                                                105.5        95.2
Interest-bearing borrowings                               482.8     1 028.7
Total equity and liabilities                            7 999.3     6 771.4
Net asset book value - per share (cents)                  290.9       332.4
GROUP ANALYSIS
Total assets                                            7 999.3     6 758.3
Woolworths                                              7 610.5     6 390.4
Country Road                                              388.8       367.9
Inventories                                               865.7       801.4
Woolworths                                                711.0       705.4
Country Road                                              154.7        96.0
Approved commitments for capital
expenditure                                               448.8       141.6
Woolworths                                                442.0       127.5
Country Road                                                6.8        14.1
statement of changes in equity
                                                                 Year ended
                                                               30 June 2005
                                                                   Restated
                                                                         Rm
Shareholders' interest at the beginning
of the period                                                       2 708.1
Movements for the period:
Issue of shares                                                        63.2
Share repurchase                                                  (1 002.0)
Cost of capital restructuring                                        (18.4)
Recognised gains and losses                                           460.0
Distributable reserves                                                418.5
Net profit for the period                                             779.1
Distributions to shareholders                                       (384.2)
Net fair value adjustments on financial
instruments                                                            13.2
Share-based payments                                                   10.4
Non-distributable reserves
Exchange differences on translation of
foreign operations                                                     41.5
Shareholders' interest at the end of the
period                                                              2 210.9
                                                 Ordinary           Outside
                                            shareholders'     shareholders'
                                                 interest          interest
                                                       Rm                Rm
Shareholders' interest at the beginning
of the period                                     2 184.7              26.2
Movements for the period:
Issue of shares                                      48.3                 -
Share repurchase                                        -                 -
Cost of capital restructuring                           -                 -
Recognised gains and losses                          83.2               0.9
Distributable reserves                              134.9               1.0
Net profit for the period                           421.3               1.0
Distributions to shareholders                     (282.3)                 -
Net fair value adjustments on financial
instruments                                        (12.2)                 -
Share-based payments                                  8.1                 -
Non-distributable reserves
Exchange differences on translation of
foreign operations                                 (51.7)             (0.1)
Shareholders' interest at the end of the
period                                            2 316.2              27.1
                                                         26 weeks ended
                                                             December
                                                         Total     Restated
                                                          2005         2004
                                                            Rm           Rm
Shareholders' interest at the beginning
of the period                                          2 210.9      2 708.1
Movements for the period:
Issue of shares                                           48.3         46.4
Share repurchase                                             -            -
Cost of capital restructuring                                -            -
Recognised gains and losses                               84.1        160.4
Distributable reserves                                   135.9        165.6
Net profit for the period                                422.3        387.4
Distributions to shareholders                          (282.3)      (221.8)
Net fair value adjustments on financial
instruments                                             (12.2)        (4.8)
Share-based payments                                       8.1          4.8
Non-distributable reserves
Exchange differences on translation of
foreign operations                                      (51.8)        (5.2)
Shareholders' interest at the end of the
period                                                 2 343.3      2 914.9
Cash flow statement
                                                                 Year ended
                                                               30 June 2005
                                                                   Restated
                                                                         Rm
Cash flow from operating activities
Cash inflow from trading                                              996.5
Working capital movements                                           (228.4)
Cash applied to financial services assets                           (722.0)
Cash generated/(utilised) by operating activities                      46.1
Interest received                                                     638.0
Finance costs paid                                                  (149.9)
Tax paid                                                            (314.6)
Cash generated/(utilised) by operations                               219.6
Distributions to shareholders                                       (384.2)
Net cash outflow from operating activities                          (164.6)
Cash outflow from investing activities                              (312.6)
Cash flow from financing activities
Shares issued                                                          63.2
Term borrowings raised                                                500.0
Repurchase of shares                                              (1 002.0)
Notes issued                                                        1 900.0
Capital restructuring costs                                          (18.4)
Net cash inflow from financing activities                           1 442.8
(Decrease)/increase in cash and cash equivalents                      965.6
Cash and cash equivalents at the beginning of the period            (949.9)
Effect of foreign exchange rate changes                                 7.6
Cash and cash equivalents at the end of the period                     23.3
GROUP ANALYSIS
Cash inflow from trading                                              996.5
Woolworths                                                            952.1
Country Road                                                           44.4
                                                            26 weeks ended
                                                               December
                                                               Restated
                                                           2005        2004
                                                             Rm          Rm
Cash flow from operating activities
Cash inflow from trading                                  515.1       494.8
Working capital movements                                  90.0     (118.1)
Cash applied to financial services assets               (336.7)     (456.4)
Cash generated/(utilised) by operating activities         268.4      (79.7)
Interest received                                         348.6       287.5
Finance costs paid                                      (115.7)      (62.0)
Tax paid                                                (228.9)     (170.3)
Cash generated/(utilised) by operations                   272.4      (24.5)
Distributions to shareholders                           (282.3)     (221.8)
Net cash outflow from operating activities                (9.9)     (246.3)
Cash outflow from investing activities                  (254.4)     (207.2)
Cash flow from financing activities
Shares issued                                              48.3        46.4
Term borrowings raised                                        -       500.0
Repurchase of shares                                          -           -
Notes issued                                                  -           -
Capital restructuring costs                                   -           -
Net cash inflow from financing activities                  48.3       546.4
(Decrease)/increase in cash and cash equivalents        (216.0)        92.9
Cash and cash equivalents at the beginning of the period   23.3     (949.9)
Effect of foreign exchange rate changes                   (7.3)       (0.8)
Cash and cash equivalents at the end of the period      (200.0)     (857.8)
GROUP ANALYSIS
Cash inflow from trading                                  515.1       494.8
Woolworths                                                506.9       468.6
Country Road                                                8.2        26.2
Segmental analysis
                                                                 Year ended
                                                               30 June 2005
                                                                   Restated
                                                                         Rm
Revenue
Retail
Woolworths                                                         11 288.4
Country Road                                                          995.1
Financial services                                                    773.9
Intragroup                                                           (68.5)
Total group                                                        12 988.9
Net profit before tax
Retail
Woolworths                                                            858.7
Country Road                                                           20.7
Financial services                                                    199.2
Total group                                                         1 078.6
Capital and reserves
Retail
Woolworths                                                            984.4
Country Road                                                          234.2
Financial services                                                    992.3
Total group                                                         2 210.9
Return on Equity
                                                                          %
Retail
Woolworths                                                             71.7
Country Road                                                           10.3
Financial services                                                      9.5
Total group                                                            31.2
                                                            26 weeks ended
                                                               December
                                                               Restated
                                               2005        2004           %
                                                 Rm          Rm      Change
Revenue
Retail
Woolworths                                  6 511.2     5 559.1       17.1%
Country Road                                  510.8       474.4        7.7%
Financial services                            430.0       354.3       21.4%
Intragroup                                   (36.7)      (34.7)
Total group                                 7 415.3     6 353.1       16.7%
Net profit before tax
Retail
Woolworths                                    532.7       441.3       20.7%
Country Road                                    8.0         6.1       31.1%
Financial services                             75.8       101.0     (25.0%)
Total group                                   616.5       548.4       12.4%
Capital and reserves
Retail
Woolworths                                  1 003.8       879.5       14.1%
Country Road                                  199.1       188.4        5.7%
Financial services                          1 140.4     1 847.0     (38.3%)
Total group                                 2 343.3     2 914.9     (19.6%)
Return on Equity
                                                  %           %
Retail
Woolworths                                     72.0        75.9
Country Road                                    7.7         6.8
Financial services                             10.1         8.2
Total group                                    37.2        27.6
Notes
1.    BASIS OF PREPARATION AND IFRS ADOPTION
      The interim financial statements comply with IAS 34 (AC127) of
      International Financial Reporting Standards (IFRS).
      In accordance with the Listing Requirements of the JSE Limited the group
      is adopting IFRS with effect from 1 July 2005. As the group publishes
      comparative information in its financial statements, the date of
      transition to IFRS is 1 July 2004, which represents the start of the
      earliest period of comparative information presented. The financial
      information has been prepared in accordance with IFRS and interpretations
      in effect on 1 July 2005.
      Accounting policies used are consistent with those used in the published
      June 2005 annual financial statements, except where accounting policies
      have changed as a result of the first-time adoption of IFRS as noted
      below.
      1.1   Foreign currency translations
            Foreign operations are subsidiaries of the group based in a country
            or currency other than that of the holding company.
            Foreign operations are translated from their functional currency
            into South African Rands at the rates of exchange ruling at the
            balance sheet date in respect of balance sheet items, and at an
            average rate per month in respect of income statement items. Gains
            and losses on the translation of foreign operations' balance sheet
            items are taken directly to non-distributable reserves.
            The change in translation method for foreign subsidiaries has
            resulted in a reclassification of foreign exchange losses between
            retained profits and the foreign currency translation reserve, both
            of which form part of equity.
      1.2   Property, plant and equipment
            The useful lives and residual values of assets are reviewed
            annually. This requirement has resulted in a lower depreciation
            charge and a reversal of accumulated depreciation.
      1.3   Investment property
            Property which the group holds to earn rental income or for capital
            appreciation is classified as investment property.
            Investment properties are initially recognised at cost.
            Subsequently they are stated at cost less accumulated depreciation
            and any impairment in value.
            Transfers are made from or to investment properties when there is a
            change in use of the property.
      1.4   Financial instruments
            Financial assets are subject to impairment when there is objective
            evidence that a loss event has impacted the estimated future cash
            flows to be received from that asset.
      1.5   Transitional arrangements
            IFRS 1 - First-time adoption of IFRS requires full retrospective
            application of the standards with the exception of certain optional
            and mandatory exemptions. The exemptions as noted below have been
            elected.
            1.5.1 Employee benefits - Previously unrecognised actuarial losses
                  of R7.3m relating to the post- retirement medical aid
                  liability have been included in the liability at the
                  transition date.
            1.5.2 Business combinations - The group has elected not to revisit
                  the fair values and goodwill estimation of past business
                  combinations.
            1.5.3 Share-based payments are expensed from 1 July 2004 onward.
IFRS IMPACT ON REPORTED BALANCE SHEETS
                                                                  Effect on
                                                                     assets
                                                        Notes            Rm
Transition date 1 July 2004
Employee benefits                                       1.5.1           2.1
Property, plant and equipment                             1.2          52.1
Impairment of financial services assets                   1.4          52.0
Foreign currency translations                             1.1           7.1
                                                                      113.3
Year ended June 2005
Employee benefits                                       1.5.1           2.1
Property, plant and equipment                             1.2          57.9
Impairment of financial services assets                   1.4          33.9
Foreign currency translations                             1.1           7.9
                                                                      101.8
Interim period ended December 2004
Employee benefits                                       1.5.1           2.1
Property, plant and equipment                             1.2          55.6
Impairment of financial services assets                   1.4          43.5
Foreign currency translations                             1.1           7.6
                                                                      108.8
                                                    Effect on     Effect on
                                                  liabilities        equity
                                                           Rm            Rm
Transition date 1 July 2004
Employee benefits                                         7.3         (5.2)
Property, plant and equipment                               -          52.1
Impairment of financial services assets                     -          52.0
Foreign currency translations                               -           7.1
                                                          7.3         106.0
Year ended June 2005
Employee benefits                                         7.3         (5.2)
Property, plant and equipment                               -          57.9
Impairment of financial services assets                     -          33.9
Foreign currency translations                               -           7.9
                                                          7.3          94.5
Interim period ended December 2004
Employee benefits                                         7.3         (5.2)
Property, plant and equipment                               -          55.6
Impairment of financial services assets                     -          43.5
Foreign currency translations                               -           7.6
                                                          7.3         101.5
IFRS IMPACT ON REPORTED RESULTS
                                                       Net profit
                                                       before tax       Tax
                                             Notes             Rm        Rm
Year ended June 2005
Share-based payments                         1.5.3         (10.4)         -
Property, plant and equipment                  1.2            7.6         -
Impairment of financial services assets        1.4         (25.6)     (7.4)
Foreign currency translations                  1.1            2.7       0.8
                                                           (25.7)     (6.6)
Interim period ended December 2004
Share-based payments                         1.5.3          (4.8)         -
Property, plant and equipment                  1.2            3.5         -
Impairment of financial services assets        1.4         (11.1)     (3.3)
Foreign currency translations                  1.1            1.6       0.5
                                                           (10.8)     (2.8)
                                                   Outside     Attributable
                                              shareholders           profit
                                                        Rm               Rm
Year ended June 2005
Share-based payments                                     -           (10.4)
Property, plant and equipment                            -              7.6
Impairment of financial services assets                  -           (18.2)
Foreign currency translations                            -              1.9
                                                         -           (19.1)
Interim period ended December 2004
Share-based payments                                     -            (4.8)
Property, plant and equipment                            -              3.5
Impairment of financial services assets                  -            (7.8)
Foreign currency translations                            -              1.1
                                                         -            (8.0)
IFRS AUDIT OPINION
The preliminary IFRS financial information as at 30 June 2005 has been audited.
A copy of the unqualified Special Purpose Audit Report of the joint auditors,
Ernst & Young and SAB & T Inc., is available for inspection at the registered
office of the company.
2.    Change in comparative period classifications and disclosures
Certain operational costs of the distribution subsidiary have been reclassified
from cost of sales to other operating costs.
      The 2005 reclassification amounts to R103.4m which has the effect of
      increasing gross margin to 32.7% from 31.2% as would have been previously
      stated.
      Operating leases - In accordance with guidance provided by Circular
      7/2005 released by SAICA, operating lease expenses are recognised on a
      straight-line basis over the term of the lease.
      The effect on profit was R11.7m net of deferred tax at the prevailing
      rate.
3.    The tax rate of 31.5% (2004: 29.4%) is the estimated average annual
      effective income tax rate of 29.0% (2004: 29.4%) plus Secondary Tax on
      Companies (STC) on the dividend portion of the final distribution for
      the June 2005 year, paid in September 2005.
4.    The difference between earnings per share and diluted earnings per share
      results from outstanding options.
5.    Unutilised banking facilities amount to R1 971.4m (2004: R1 391.9m). In
      terms of the Articles of Association, there is no limit on the group's
      authority to raise interest-bearing debt.
COMMENTARY
GROUP RESULTS
The board wishes to announce another set of solid results. The headline
earnings per share for the twenty-six weeks to December 2005 increased 19.6%
(23.9% prior to the non-comparable STC payment) from 44.4 cents to 53.1 cents
per share. The return on equity grew to 37.2% from 27.6%. A dividend of 24.0
cents per share has been declared representing an increase of 29.7% over the
same period last year. The uplift in the level of the dividend reflects the
decision of the board to increase the proportion of the dividend payable at the
interim period. For the full financial year we aim to maintain the dividend
cover at around 1.7 times earnings.
TRADING ENVIRONMENT
In South Africa the retail environment remained robust due to stable interest
rates, low inflation, continued growth of the emerging black market and an
increase in consumers' real disposable income. This trend is expected to
continue.
FINANCIAL REVIEW
Group revenue has increased by 16.7% to R7.4bn.
Operating profit for the group increased by 19.6% to R730.3m with an
improvement in operating margin from 9.6% to 9.8%. This has been achieved
despite our investment in initiatives which are designed to enhance future
growth including the World of Difference loyalty programme, an accelerated
store development plan and a customer service improvement project.
The group's gross profit percentage decreased from 32.9% to 32.7% as a result
of the change in mix of our different businesses.
The share repurchase in March 2005 has resulted in an increase in borrowings
over the same period last year and a substantial increase in finance costs. The
positive effect of the capital restructuring is reflected in the increase in
headline earnings per share and an enhanced return on equity.
Headline earnings per share has been impacted by 1.9 cents per share due to an
increase in the effective tax rate as a result of STC payable on the dividend
paid in September 2005. The comparative effective tax rate for the year will be
further impacted by the STC payable on the dividend in March 2006.
WOOLWORTHS OPERATING REVIEW
RETAIL
Clothing and home grew sales by 12.6% in total and 8.2% in comparable stores,
with an average deflation rate of approximately 2.3%. There was good growth in
womenswear, attributable to the successful implementation of our new design-led
process, which ensures that our offering meets the taste requirements of both
our modern and classic customers. This process is currently being rolled out to
other departments. Childrenswear also experienced good growth by providing
improved value and a better range structuring.
Food continued to perform exceptionally well and sales grew by 20.9% in total
and 12.2% in comparable stores, with an average inflation rate of approximately
3.7%. Our strong growth is driven by our convenient locations and our continual
focus on offering our customers differentiated products.
In corporate stores we expanded our trading space by 4.2% in clothing and home
and 6.5% in food over the period.
FINANCIAL SERVICES
Our in-store card, credit card and personal loan books grew by 19.3% for the
twelve months to December 2005. The net bad debt experience on the combined
books increased to 2.8% of advances due to a planned extension of our credit
limits. Overall operating profit increased from R161.1m to R187.3m. Net profit
before tax decreased from R101.0m to R75.8m due to the increase in finance
costs, arising from the restructure of the balance sheet.
COUNTRY ROAD OPERATING REVIEW
Retail sales were 6.7% higher in Australian dollar terms than the same period
last year, with comparable store growth of 5.9%. There was a strong increase in
unit sales growth which was achieved by an ongoing focus on improving value, to
make the business more accessible to a broader range of customers. Overall
total sales increased 1.0% from the same period last year. We are pleased to
note that retail represents a higher proportion of sales in line with our
strategy.
Net profit before tax increased from A$1.4m to A$2.3m.
GROUP PROSPECTS
Given the current trading environment we expect to deliver another year of
solid growth in headline earnings per share, after adjusting for the
non-comparable STC payments.
EMPOWERMENT PLANS
Woolworths is committed to black economic empowerment (BEE) and is currently
evaluating its empowerment initiatives in terms of the recently published
codes. Woolworths supports the broad-based ownership approach favoured by the
Department of Trade and Industry and as such is developing plans around BEE
ownership, which will be presented to shareholders for approval at the
forthcoming annual general meeting.
CHANGE TO THE BOARD OF DIRECTORS
On 25 November 2005 Nolitha Fakude resigned from the board due to her executive
director commitments. We would like to thank her for the meaningful
contribution she made to the group.
DA Hawton                      SN Susman
Chairman                       Chief executive officer
Cape Town
16 February 2006
DIVIDEND PAYMENT
Notice is hereby given that the directors declared an interim dividend of 24.0
cents per share for the six months ended December 2005.
The important dates in March 2006 will be as follows:
Last day to trade to receive dividend                          Friday, 3 March
Shares commence trading "ex" dividend                          Monday, 6 March
Record date                                                   Friday, 10 March
Payment date                                                  Monday, 13 March
Share certificates may not be dematerialised or rematerialised between Monday,
6 March 2006 and Friday, 10 March 2006, both days inclusive.
CL Lowe
Group secretary
Cape Town 16 February 2006
DIRECTORATE AND STATUTORY INFORMATION
Non-executive directors: Buddy Hawton (Chairman), Mair Barnes (British),
                         Nigel Colne (British), Brian Frost, Mike Leeming,
                         Chris Nissen, Sindi Zilwa
Executive directors: Simon Susman (CEO), Richard Inskip, Norman Thomson
Group secretary: Cherrie Lowe Share code: WHL ISIN: ZAE000063863
Registered address (postal and physical): PO Box 680
                                          Cape Town 8000
                                          Woolworths House
                                          93 Longmarket Street
                                          Cape Town 8001
                                          Registration number: 1929/001986/06
Auditors: Ernst & Young and SAB & T Inc
Bankers: Standard Bank of South Africa Limited
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd
                      70 Marshall Street
                      Johannesburg 2001
Visit our investor relations site: www.woolworthsholdings.co.za
Date: 16/02/2006 08:00:39 AM Produced by the JSE SENS Department
Source: JSE Securities Exchange - SENS
 
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