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Woolworths Profit Dips 3.1% In First Half

Woolworths Profit Dips 3.1% In First HalfWoolworths posted $1.28 billion in NPAT for the first half, down from $1.32 billion in the corresponding period, however recorded an increase in underlying NPAT of 4.7 per cent to $1.38 billion, with the retailer’s revenue rising 1.9 per cent to $32.68 billion.

Woolworths advised that its BIG W transformation continued throughout the first half, impacting trading results.

BIG W’s sales of $2.36 billion represented a decrease of 3.5 per cent on the corresponding period, with Woolworths also noting the impact of declining consumer sentiment, ongoing price deflation and inventory clearance activity.

Big W’s earnings before interest and tax (EBIT) of $109.7 million were down 9 per cent.

Masters sales, meanwhile, came in at $505 million, an increase of 28.5 per cent on the corresponding period, with EBIT negative $112.2 million, compared to negative $71.9 million in the corresponding period.

“While there is a clear path to meet the guidance provided of net profit after tax of 4-7 per cent in FY15, we have decided to provide ourselves with additional flexibility to make the necessary investments to deliver on our long-term plans and the associated shareholder value creation,” Woolworths chief executive officer Grant O’Brien stated.

“These investments will impact second-half FY15 results and as a result we are amending guidance.”

O’Brien noted that at present the range of analyst NPAT growth forecasts for the 2015 full year is 1.8-6.6 per cent.

“Factoring in the investment initiatives now planned, our current expectations are that growth in FY 15 net profit after tax before significant items will be towards the lower end of this range,” he commented.