Sydney - Wednesday - September 21: (RWE Aust Business News) - Coles Myer Ltd lifted net profit 43.5 per cent to $616.5 million in the 52 weeks to July 25 from $429.5 million for the previous year. Underlying net profit rose 26.5 per cent to $576.5 million. Revenue rose 18.5 per cent to $32.73 billion. Basic earnings per share were 46.9c, up from 32.2c. Final dividend has been increased from 12.5c to 15c, fully franked, for shareholders registered October 15. This brings total payout for the year to 29c, up from 26c. Due to the strength of the balance sheet and cashflow, the board has suspended the dividend reinvestment plan.
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"This is the highest annual profit in Coles Myer's history, an outstanding result in which all of our major businesses have significantly improved their quality of sales and earnings," chief executive Mr John Fletcher said today. "Three years into our five-year turnaround journey, we have delivered against the progressive strategic milestones we set for ourselves. "Profit and sales have grown double-digit, our balance sheet is strong, we are running ahead of our cost savings targets and our cash flows are excellent. "We are well on the way to achieving our $800 million aspirational target in FY2006, with many opportunities ahead to further grow our business," Mr Fletcher said. The Food and Liquor business reported its best annual profit growth in six years and the non-food businesses made "excellent" progress against their rebuild strategies. Margins increased in all business groups during the year. The company's newest business, Coles Express, surpassed all expectations in its first year of trading, reporting retail EBIT of $20.1 million, easily exceeding its cost of capital and being EPS positive in its own right.
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Outlook for the group remains positive. As anticipated, phasing out the shareholder discount card has had only a marginal impact on group sales during the quarter to date, and is contributing to earnings growth in line with strategy. In the first eight weeks of the 2005 year, sales across the group (excluding Coles Express) increased 6.5 per cent, notwithstanding the removal of the discount. For the year, the Food and Liquor business is expected to deliver upper-single digit sales growth and comparative-store sales growth in line with 2004, at around 4 per cent. For the combined non-food businesses, directors expect mid-single digit sales growth in 2005, in line with strategy and as experienced in the first eight weeks of the first quarter. Consistent with previous years, earnings guidance will be provided at the annual general meeting (November 18). Shares in Coles Myer rose 20c to $9.47 yesterday. ENDS
