Woolies posts 30% profit increase

UK sweets-to-DVDs retailer Woolworths Group Plc posted a 30 percent rise in annual profit yesterday, above average forecasts, but slashed its total year dividend by 66 percent amid tough trading conditions.

Adjusted profit for the year to Feb 2 was 28.3 million pounds, above an average analyst forecast of 27.5 million, according to Reuters Estimates.

Analysts had widely expected Woolworths, a fallen titan of the British high street with more than 800 stores, to cut the dividend.

Woolworths proposed a final dividend of 0.17 pence to make a total payout of 0.6p, down from 1.77p last year.

"The board believes that payment of a dividend at this level represents an appropriate balance between providing a return to shareholders and preserving the financial flexibility necessary to support the plans and ongoing development of the business," Chairman Richard North said in the results statement.

The company said retail like-for-like sales fell 3.2 percent in the year, which it said partly reflected a decision not to chase unprofitable sales.

"Whilst current like-for-like sales are up against last year, the much earlier Easter makes the like-for-like comparisons meaningless," Chief Executive Trevor Bish-Jones said.

"It is early days and the retail environment is likely to remain challenging in the current year," he added.

Woolworths shares, which have underperformed the UK general retailers' index by around 38 percent in the past

12 months, closed at 11.75 pence on Tuesday to value the company at around 161.4 million pounds.

Agencies

(China Daily 04/03/2008 page16)