UPDATE: Woolworths Sees FY10 After Tax Profit Growing 8%-11%
(Adds detail throughout)
By Cynthia Koons
Of DOW JONES NEWSWIRES
SYDNEY -(Dow Jones)- Woolworths Ltd. (WOW.AU) reiterated Thursday that it
expects net profit to break through the A$2 billion mark this financial year and
said it is still on the lookout for investment opportunities.
This comes just months after the company announced it was entering the home
improvement market through a joint venture with U.S.-based Lowe's Cos. (LOW).
Chairman James Strong said at the company's annual general meeting that
management is continuing to monitor its options "including new investments".
The group reiterated earnings and sales guidance for fiscal 2010 that it
provided in August.
Woolworths expects net profit to grow between 8% and 11% for fiscal 2010 and
maintained sales for 2010 should grow in the upper single digits, excluding
petrol sales. It expects earnings before interest and tax to continue to grow
faster than sales in fiscal 2010.
For fiscal 2009, Australia's largest retailer reported net profit of A$1.84
billion so the guidance indicates the group could earn more than A$2 billion in
the fiscal year to June 30.
While Chief Executive Michael Luscombe said the year began "optimistically,"
it wasn't enough to lead the retailer to upgrade its guidance.
Woolworths' retail empire includes supermarkets, Big W discount department
stores, Dick Smith electronics stores and petrol and liquor stores.
Luscombe warned rising interest rates could hurt the retailer.
Woolworths is in the process of creating a big box hardware chain to compete
with Wesfarmers Ltd. unit Bunnings. Strong called the company's foray into the
A$24 billion home improvement sector in Australia is a "good example" of a
decision that the group spent years researching.
Attendees at the annual general meeting questioned Woolworths' involvement
with the gambling industry in Australia, given its ownership of pubs and slot
machines. Luscombe said the group has no plans to exit those businesses.
Strong said problem gaming is a "serious issue" and that the group will comply
with any changes in legislation on this issue. Australia's Productivity
Commission issued a draft report recently outlining potential changes to slot
machine rules in order to combat problem gaming.
-By Cynthia Koons, Dow Jones Newswires; 61-2-8272-4691; cynthia.koons@
dowjones.com
(END) Dow Jones Newswires
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