Woolworths scraps final dividend as Covid-19 hits non-food sales
Fashion and food retailer Woolworths says it will reconsider dividend payments when conditions allow, holding on to its final dividend for its year to end-June after Covid-19 hit non-food sales.
The coronavirus caused significant disruption to trade by closing stores and reducing footfall, the group said on Thursday, adding it has embarked on promotional initiatives to clear inventory.
The group’s total dividend fell 53.3% to 89c in its year ending June 28. Headline earnings per share fell 65.1% to 119.8c, after accounting changes, while the prior comparative period also had 53 weeks.
The group’s pretax profit rose to R1.4bn, from a loss of R1.8bn previously. In the prior comparative period, Woolworths wrote down its David Jones business in Australia by about R6.1bn.
Sales in the Woolworths Fashion, Beauty and Home division were down about 10.7% year on year, but sales at Woolworths Food grew 10.7%.
Woolworths Food sales peaked in March and April, with above-market growth continuing into May and June, the group said.
Woolworths said the economic consequences of the pandemic were still unfolding, and it expects continued pressure on trading activity in SA and Australia.
“Heightened competition and promotional activity is likely to persist, notwithstanding some consolidation in the industry,” the group said.
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