Woolies expects higher earnings

It says this is primarily due to the profit made on the disposal of a 50% plus one share of Woolworths Financial Services to ABSA Group Limited on 1 October 2008 of R380-million, and growth in headline earnings per share for the period is unlikely to exceed 5% of the results of the prior year.

The group's said in a trading update that total sales for the 52-week period ended June 2009 (compared with the 52-week period of last year) showed a growth of 7.2%, with a comparable sales growth of 0.4%.

Comparing this year's 52-week period to last year's reported period of 53 weeks, group total sales grew by 5.5%.

"Sales in the second half are in line with that experienced in the first half," the company said.

"The fourth quarter growth has shown signs of recovery. Middle- and upper-income consumers have seen some relief with the reduction in interest rates; while fuel and food prices have remained relatively high. Woolworths customers are reacting positively to our competitive opening price point value lines," it added.

Woolworths said Country Road has shown good resilience in a tough Australian market and has delivered a strong sales growth.

Woolworths Financial Services closing debtors' books at June 2009 were 6.4% up against June 2008. Bad debts were seen as being well controlled, with an impairment charge as a percentage of average gross receivables of 7.4% (June 2008: 9.5%).

The group's results for the year ended 30 June 2009 are scheduled to be released on 27 August 2009.

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