High-end retailer Woolworths said yesterday that its interim group sales had soared by more than 55% to R30.3-billion as sales figures from recent Australian acquisition David Jones were included for the first time.
The R21.4-billion acquisition of David Jones‚ through the combination of cash‚ debt and a rights issue‚ was concluded in August.
At the time analysts believed the price to be outrageous‚ but the gamble appears to have paid off.
“The magnitude of the new-found David Jones presence is highlighted by the effect on Woolworths’ group sales‚ which increased by 55.2%‚ a figure which is more than four times less with the omission of David Jones‚” IG market analyst Shaun Murison said.
In the 26 weeks ended December 28, diluted headline earnings per share rose 6.4% to 192.4c, compared with the year-earlier period.
Operating profit lifted 44.5% to R3billion and an interim cash dividend of 96.5c/share was declared for the period.
Woolworths chief executive Ian Moir was pleased with the results and said all business units had performed ahead of the market‚ despite tough trading conditions.
“We are progressing well with the integration of David Jones and the full ownership of the Country Road Group‚ which positions us as a leading southern hemisphere retailer and makes us better able to compete with the ever-increasing presence of northern hemisphere retailers‚” he said.
Clothing sales grew 9.4% in South Africa‚ with good performance from core men’s wear and women’s wear categories‚ and a softer performance from children’s wear and footwear. Total clothing and general merchandise sales grew 8%.
Food division sales grew by 14.1% and operating profit lifted by 24.3%.
Woolworths said the larger supermarket format was working well and the food division had delivered above-market growth every month since September 2011.
The company believed economic conditions in South Africa would remain constrained‚ especially in the lower- and middle-income segments, where consumers remain highly indebted.
“Sales may be further affected by load-shedding. The upper-income segment we operate in continues to show resilience. We continue to trade ahead of the market and trading for the first six weeks of the new financial year has been positive.
“In Australia there are early signs of an improved retail environment and we expect sales in both David Jones and the Country Road Group to be ahead of the market‚” it said.