WHL - Woolworths Holdings - Trading Update For The 53 Weeks Ended 30 June 2008
Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1929/001986/06
Share code: WHL & ISIN: ZAE000063863
("Woolworths Holdings" or "the group")
TRADING UPDATE FOR THE 53 WEEKS ENDED 30 JUNE 2008
Trading conditions in the second half have deteriorated substantially with a
further decline in consumer spending as a result of additional interest rate
hikes and increases in fuel and food prices. Middle and upper middle income
consumers have felt the pinch of the current economic conditions particularly
strongly. This is the heartland of the Woolworths customer. We have accordingly
adjusted our opening price point offer and given our continuing insistence on
quality, our range now is extremely competitive.
The year ended 30 June 2008 had 53 trading weeks compared to the 52 weeks in
last year. Sales performance by the retail operations of the group during the
period was as follows:
Sales growth Comparable Average
for 30 June store sales inflation
53 52 53 52
weeks weeks weeks weeks
vs 52 vs 52 vs 52 vs 52
Woolworths retail 13.3% 11.4% 7.3% 5.3%
Clothing and general 6.1% 4.4% 3.1% 1.6% 8.5%
Food 18.8% 16.7% 9.9% 7.8% 13.1%
Country Road (A$) 21.9%* 21.9% 8.4%* 8.4%
Total group 15.5% 13.7% 8.3% 6.5%
* Country Road did not have a 53 week year.
Trading space in Woolworths retail increased by 4.8% in clothing and general
merchandise, and 14.4% in food at the end of June 2008, compared to the prior
Woolworths Financial Services' combined debtors' books at June 2008 were flat
against June 2007, although the average books for the year were 12.6% higher
than the average for 2007. Interest yields increased to 23.5% (2007: 19.9%) and
net bad debt expressed as a percent of the gross book, increased to 7.9% (2007:
4.9%). There are some early indications that bad debt may have peaked.
At the time of the interim results, management undertook to reduce cost growth
for the second half and was successful in achieving this. The Australian
operation, Country Road, has shown resilience to the global slowdown, returning
Growth in profit before tax and non-comparable items in the second half is
expected to be positive.
Headline earnings per share ("heps") are adversely impacted by a R50million non-
comparable IFRS2 charge relating to the group's broad based BEE scheme and an
increase in the effective tax rate of 8% as a result of the effect of last
year's recognition of the deferred tax asset in Country Road and of STC on share
On 17 July 2008, the South African Competition Authorities approved, without any
conditions, the acquisition by Absa of a 50% plus one ordinary share of
Woolworths Financial Services (Proprietary) Limited. It is anticipated that the
remaining conditions precedent will have been met by 31 August 2008.
The above information has not been reviewed or reported on by the group's
The group's financial results for the 53 weeks to 30 June 2008 are scheduled to
be released on 21 August 2008.
18 July 2008
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 18/07/2008 13:01:56 Produced by the JSE SENS Department.
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