Woolies stores are back in the black

Apr 3 2008 by Peter McCusker, The Journal

WOOLWORTHS returned its high street business to the black but issued a warning it faced more challenging trading conditions ahead.

The under-pressure retail arm posted an adjusted profit of £3.4m for the year to February 2, reversing a £12.9m loss for the year before.

Total profits for the group, which includes its better performing wholesale entertainment arm, came in at £28.3m for the year, up from £21.8m.

The group said it had pursued “rigorous cost control” and not chased unprofitable sales in its 800-store high street operation as like-for-like sales dipped 3.2%. Chief executive Trevor Bish-Jones said he was “particularly pleased” about the return to profitability.

But he added: “It is early days and the retail environment is likely to remain challenging in the current year. We will, therefore, continue to manage the business tightly.”

As part of the cautionary outlook, Woolworths said it was slashing its annual dividend by nearly two thirds to help it “preserve financial flexibility”.

Total group sales were up 8.5% to £2.97bn. Woolworths said its “key focus” had been to return the retail arm to profitability.