WHL - Woolworths Holdings - Trading Update For The 26 Weeks To December 2008
And Trading Statement
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 26 WEEKS TO DECEMBER 2008 AND TRADING STATEMENT
The middle and upper income consumer primarily served by Woolworths SA is being
severely impacted by the current economic conditions and is trading down. To
assist our customers, Woolworths has introduced more competitive opening prices
in both foods and clothing. Tighter control of costs and inventory has assisted
in reaching the profitability levels attained.
Country Road has achieved an excellent result despite tough trading conditions.
Woolworths Holdings increased sales by 8.1% for the 26 weeks to December 2008
("the period") compared to the same period last year. Comparable store sales
growth was 0.7%.
The sales performance of the retail operations of the group during the period
was as follows:
Sales Comparable Price Growth in
growth for store sales movement trading
the period growth (%) space
(%) (%) (%)
Woolworths retail 5.3 (1.6)
Clothing and (0.6) (4.1) 0.0 4.5
Food 9.5 0.3 9.0* 14.5
Country Road (A$) 20.0 12.8
Total group 8.1 0.7
* Our food business is now more competitive and better positioned to cope with
the down trading in the market, reflected by our 9.0% price movement. Our
average food price inflation at 12.1%, is also materially lower than the market.
Woolworths Financial Services closing debtors' books at December 2008 were 2.9%
up against December 2007. Bad debts were well controlled, with net bad debts
(excluding costs of recovery) expressed as a percentage of the gross book was
7.4% (December 2007: 7.1%).
As outlined in the trading statement released on 19 November 2008, the group
anticipated that earnings per share ("EPS") for the six months to December 2008
would show an improvement of more than 20% over last year.
We now estimate that EPS will be between 90% and 100% higher than the results
for the corresponding period of the previous year. This is primarily due to the
profit made from the acquisition by ABSA Group Limited of 50% plus one share of
Woolworths Financial Services on 1 October 2008 of approximately R380 million.
An STC charge of R75 million on the special dividend paid on 15 December 2008
has been recognised in EPS.
We also project that headline earnings per share ("HEPS") for the period will be
between 8% and 13% higher than the results for the corresponding period of the
previous year. Excluding the R75 million STC charge referred to above, adjusted
HEPS is expected to be between 24% and 29% higher.
These earnings will benefit from a 4% lower effective tax rate, which excludes
the STC charge on the special dividend.
Shareholders are advised that the trading and financial information contained in
this announcement has not been reviewed or reported on by the group's external
The group's results for the half year ended 31 December 2008 are scheduled to be
released on SENS on 19 February 2009.
Simon Susman (Chief executive officer) on 021 407 2700
Norman Thomson (Finance director) on 021 407 3337
Cherrie Lowe (Group secretary) on 021 407 3160
20 January 2009
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 20/01/2009 16:00:04 Produced by the JSE SENS Department.
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