Woolworths Group’s FY21 group net profit cracked $2 billion, rising 77.8 per cent to $2.07 billion, with the caveat that the figure was before adjusting for the demerger of Endeavour Group. Its group earnings before interest and tax was up 13.7 per cent to $3.66 billion due to supermarket performance, a BigW rebound and good growth in drinks and hotels.
Snapshot
- EBIT of $3.6bn, up 13.7%
- NPAT at $1.9bn up 22.9%
- Sales of $67bn up 5.7%
The share buy-back comes after the spin-off of its hotels and liquor business and will release $840 million of franking credits. It has declared a 2H dividend of 55 cents per share, bringing its full year dividend to 108 cents, 14.9 per cent up on FY20. The buy-back and final dividend is expected to return $1.1 billion of franking credits to shareholders.
Woolworths Group CEO Brad Banducci said the group was facing a possibly more challenging 2022 than 2021 with ongoing logistical hurdles and staff welfare measures.
Sales and earnings across the group between H1 and H2 were very different due to the COVID-19 cycle.
Sales in supermarkets slowed in H2 as customers shopped more frequently with smaller basket sizes. Highlights were 65 store renewals and 13 new supermarkets.
Banducci said more than 3300 staff were in isolation, three were in hospital and around 10,000 staff set to be impacted by strict new rules surrounding workers who live in the 12 Sydney local government areas declared hotspots but work outside them.
Pop up vaccination clinics and priority jabs for staff were already established but getting the rapid antigen tests needed for the volume of staff was a logistical challenge, he said.
On top of this, out-of-stocks online were sitting at around 5 per cent, with Banducci saying it was likely losing online sales because of it. The timeframe for home deliveries also had a three to four-day wait due to demand.
That said, Australia’s ecommerce sales through WooliesX increased 74.7 per cent on the prior year, with ecommerce now accounting for 7.9 per cent of sales.
Two new customer fulfilment centres were opened, a new automated facility is being built in Auburn, Western Sydney and direct-to-boot services were added to 629 stores.
BigW had a major rebound, with 20 per cent sales growth in H1 and overall its EBIT increased more than 300 per cent to $172 million.
Endeavour Drinks also had a good run, with sales up 9.6 per cent and an EBIT increase of 17.7 per cent due to in-home consumption and premiumisation trends.
The company increased its share in Quantium from 47 to 75 per cent and completed its 65 per cent investment in PFD after year’s end.
Against its sustainability plan, the group received WGEA Employer of Choice for Gender Equality and Australian Workplace Equality Index Gold Tier Status for LGBTQ+ inclusion
It reduced scope 1&2 carbon emissions by 27 per cent from 2015 levels, 4.1 per cent down on 2020, and it removed 2,571 tonnes of plastic, up 21.5 per cent since 2020.
