Woolworths Group (WOW) | SNAPSHOT
Profile: Woolworths Group (WOW) is an Australian-based company that operates businesses such as Woolworths Supermarkets and Big W nationwide, and the Countdown Supermarkets in New Zealand. Other operations include Hotels and Liquor (Endeavour Drinks) – through brands such as Dan Murphy’s and BWS – as well as other wholesale businesses.
History: Woolworths Stupendous Bargain Basement opened in Sydney’s Imperial Arcade on 5 December 1924. In 1929, WOW opened its first store in New Zealand. In 1976, the first Big W store opened in NSW. WOW listed on the ASX in 1993. In April 2019, WOW completed the sale of its Petrol business for c.$1.7bn.
Earnings composition: Australian Food generated $1.9bn, or 68%, of FY19 EBIT (Earnings Before Interest and Tax). New Zealand Food and Endeavour Drinks generated EBIT of A$277m (10%) and $474m (17%) respectively. Hotels reported EBIT of $261m (10%). BIG W reported a loss before interest and tax of $85m (-3%). The Other segment, which includes overheads and discontinued operations, reported a $60m (-2%) loss.
Most recent result – FY19: EBIT from continuing operations was $2.7bn, up 7% on the prior corresponding period. This was primarily driven by Australian Food EBIT, which grew 5.7% to $1.9bn, with improved sales momentum in 2H19 benefitting from successful campaigns including Disney Words and Earn & Learn. NPAT from continuing operations was up 7.2% on the pcp to $1.8bn. EPS from continuing operations was 134 cents, up 8.8% on the pcp. A $0.57 dividend was declared, bringing total dividends for FY19 to $1.02 – largely in line with the $1.03 cents (including a $0.10 special) declared in FY18. WOW also distributed approximately c.$1.7bn via an off-market buy-back following the sale of its Petrol business.
Company outlook: WOW intends to merge its Endeavour Drinks and ALH Hotels businesses to form a combined business called Endeavour Group (see figure 8), subject to approvals. It then intends to separate Endeavour Group from Woolworths through a demerger or “value-accretive alternative.”
Important dates: Ex-dividend date is 3 September 2019. Payment date is 30 September 2019. 1Q20 results scheduled for 30 October 2019. AGM is scheduled for 16 December 2019. 1H20 results scheduled for 26 February 2020.