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South Africa's Woolworths Sees Profits Up, Restores Dividend

By Dayeeta Das
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South Africa's Woolworths Sees Profits Up, Restores Dividend

South African retailer Woolworths Holdings resumed dividend payouts on Thursday after its annual profit surged and the sale of some Australian properties helped it to cut its debt.

The clothing, food and homeware retailer had been renegotiating leases, reducing capital expenditure and cutting costs to help bolster its balance sheet. It has also sold Bourke Street Mens and Elizabeth Street properties in Australia, a part of its upmarket department chain David Jones.

The group reduced net borrowings by over 10 billion rand (€570 million) to 1.1 billion rand, with a slight increase in free cash flow in the 52 weeks ended 27 June, group financial director Reeza Isaacs said.

"The significant reduction in our borrowings gives us greater scope in deploying our capital, one of which is resuming dividends," Isaacs told investors.

The retailer declared a final dividend of 66 cents per share, a 25.8% decrease on the prior year's 89 cents. It had withheld dividends at the half year stage to preserve cash.


Shares in the company traded 1.5% higher by 10:15 GMT.

Last year, the company flagged a small decline in annual sales after its non-food stores were shut in the second-half of its financial year due to COVID-19 lockdowns.


Its 2022 financial year capex is seen at 2.8 billion rand (€160 million), up from 1.4 billion rand in 2021 as it looks to aggressively invest in technology and its supply chain.

Woolworths had sold and leased back the Australian properties for a combined 631 million Australian dollars.


The retailer said it continued to see signs of recovery from the COVID-19 fallout although consumer confidence in South Africa is still weak.

In the first seven weeks of the new financial year, sales in David Jones and clothing chain Country Road in Australia fell 26.7% and 13.4% respectively, due to the current multiple lockdowns in parts of the country.

Overall group turnover and concession sales rose by 9.7% to 85.9 billion rand. Headline earnings per share (HEPS), the main gauge of profit in South Africa, climbed more than 200% to 374.4 cents while adjusted diluted HEPS, which strips out certain items, rose by 102.9%.

News by Reuters, edited by ESM. For more Retail stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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