WOOLIES' HOME IMPROVEMENT EXIT TO COST AU$3.25b

By NZHJ February 26, 2016 International News

Woolworth's half year result (to 3 Jan 2016) is headlined "Rebuilding the business"...

If you are a Woolworths shareholder, the conglomerate's latest half year isn't good reading.

Group sales were down (-1.4%) and the EBIT down 190% reflecting a loss of AU$1.79 billion after significant items (i.e its Home Improvement businesses).

The "significant items" relate to its exit of home improvement, for which there is a provision for impairment of AU$1.46 billion against property and plant and AU$0.55 billion against  inventory, as well as AU$1.24 billion put against onerous lease expenses, store and other exit costs.

The only bottom line that grew was the New Zealand supermarkets EBIT which was up a marginal 0.9%.

Masters' sales for the half year were AU$625m (+23.4%) but at the same time its negative EBIT also increased, to -AU$137.9m (+22.9%).

Sales at Home Timber & Hardware however remained buoyant at AU$525m (+8.7%) with an EBIT that grew +43.3% to $12.9m.

Look for more in-depth on this and a progress update on the sale or closure of Masters and Home Timber & Hardware in our April magazine.

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