Insights 26th August 2021
Woolworths announces $2b share buy-back | Woolworths (ASX:WOW) Reporting Season Results
Woolworths Group (ASX:WOW) reported its 2021 financial year results, here’s what you need to know.
It was a transformative year for Woolworths after its divestment of Endeavour Group at the end of June, and the supermarket chain has speat the year operating the high demand challenges of the pandemic, as well as worked toward a COVID-19 safe experience for customers and staff.
WOW group sales increased 5.7% to $67.278 billion. Online shopping has become more popular in lockdown, boosting eCommerce sales 58.1% to $5.602 billion. In Australian food particularly, eCommerce sales increased 74.7% compared to the year prior, with eCommerce penetration of 7.9% of sales.
Group earnings before interest and tax (EBIT) increased 13.7% to $3.663 billion. Group net profit after tax increased 22.9% to $1.972 billion, beating market expectations of $1.914 billion.
Woolworth’s owned Big W also had a positive year in sales and EBIT growth. EBIT increased over 300% in the year to $172 million.
Woolworths have announced a $2 billion off market share buy-back. WOW have also declared a second half dividend of 55 cents per share. This brings the full year dividend to 108 cents per share, up 14.9% on FY20. The share buy-back and final dividend will return approximately $1.1 billion of franking credits to shareholders.
As for the Woolies Everyday Rewards system – that has increased to 13.1 million members, up 6%.
In November 2020, Woolworths also launched its 2025 Group Sustainability Plan, and has made great progress so far. Some highlights include gender equality and diversity, a 27% reduction in carbon emissions from 2015 levels, and more than 6,000 tonnes of plastic packaging removed since 2018.
In addition, WOW announced the first automated fulfilment centre in Auburn NSW.
WOW are up about 23% year to date, and most brokers have Woolworths as a HOLD except Credit Suisse who have WOW as a SELL.