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WOOLWORTHS HOLDINGS LIMITED - Trading update and further trading statement in respect of the 26 weeks ended 26 December 2021
2022/01/20 07:06:00Download PDF Stock report
Trading update and further trading statement in respect of the 26 weeks ended 26 December 2021
Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
LEI: 37890095421E07184E97
Share code: WHL
Share ISIN: ZAE000063863
Bond Company code: WHLI
(‘the Group’, ‘the Company’ or ‘WHL’)
TRADING UPDATE AND FURTHER TRADING STATEMENT IN RESPECT OF THE 26 WEEKS ENDED 26 DECEMBER
2021
TRADING UPDATE
Group turnover and concession sales for the 26 weeks ended 26 December 2021 (‘current period’ or ‘period’)
decreased by 2.1%, compared to the 26 weeks ended 27 December 2020 (‘prior period’) and by 0.3% in constant
currency terms. Online sales grew by 22.4%, contributing 13.7% to the Group’s total turnover and concession
sales for the period. Sales in the last six weeks of the period increased by 3.0%, and by 3.5% in constant currency
terms.
As mentioned in the 20-week update, trade during the period was severely impacted by the extended lockdowns
in Australia and by the civil unrest in South Africa. Trading momentum across all divisions except Fashion Beauty
Home (‘FBH’) improved over the last six weeks of the period supported by more targeted Black Friday
promotions, positive festive season trade, and the lifting of lockdown restrictions in Australia.
Due to the above-mentioned factors, the trading results for the current period are not directly comparable to
that of the prior period.
South Africa
The Woolworths Food business grew turnover and concession sales by 3.8% for the half, accelerating its
momentum to 5.8% in the last six weeks of the period. Sales in comparable stores grew by 2.8%, with price
movement of 2.6% and underlying product inflation of 3.7%. Sales growth should be considered in the context
of the high Covid-19 base, which benefitted from increased home consumption. On a two-year basis, sales have
grown by a cumulative 15.2%, relative to the comparative 2019 period. Online sales increased by 55.8%,
contributing 3.1% of South African sales, while space grew by 2.2% relative to the prior period.
The FBH business grew turnover and concession sales by 4.2% and by 4.7% in comparable stores, with price
movement of 5.4%. Trading momentum slowed in the last six weeks of the period primarily due to Womenswear
performing below expectations. Online sales grew by 19.2%, contributing 4.4% of South African sales, while the
ongoing execution of space reduction initiatives reduced the footprint by 6.1% relative to the prior period,
resulting in improved trading densities.
The Woolworths Financial Services net book grew by 5.3% year-on-year to the end of December 2021, compared
to a 7.8% contraction at 31 December 2020, reflecting the recovery in consumer spend. The annualised
impairment rate for the six months ended 31 December 2021 improved to 4.0%, compared to 4.1% in the prior
period.
Australia and New Zealand
Trade was significantly impacted by government-enforced restrictions across the region, where we were unable
to trade in stores representing 70% of our brick-and-mortar sales base during the lockdown period. The easing
of restrictions and reopening of stores, coupled with pent up consumer demand, delivered positive sales growth
in the last six weeks of the period, notwithstanding the shift of Boxing Day sales into the second half of this
financial year versus the first half of the prior period.
David Jones’ turnover and concession sales declined by 9.2% and by 9.0% in comparable stores for the half, but
grew by 3.2% in the last six weeks of the period (7.7% adjusting for the shift in Boxing Day sales). In line with our
space reduction strategy, trading space reduced by a further 5.8% relative to the prior period. Online sales
increased by 44.2% and contributed 28.1% to total sales during the period.
Country Road Group sales declined by 3.1% and by 3.2% in comparable stores for the half, but grew by 1.7% in
the last six weeks of the period. Online sales increased by 3.6% and contributed 33.8% to total sales during the
period, while trading space reduced by 7.4% relative to the prior period.
FURTHER TRADING STATEMENT IN RESPECT OF THE 26 WEEKS ENDED 26 DECEMBER 2021
Given the prolonged lockdowns in Australia and, to a lesser degree, the disruptions in South Africa, our results
for the current period have been negatively impacted by the lost sales, coupled with the absence of JobKeeper
and rent relief which supported the prior-year base. In addition, the results of the prior period included the profit
on the sale of the Bourke Street Men’s property, as well as lease exit and modification gains.
Shareholders and noteholders are referred to the announcement released on the Stock Exchange News Service
on 17 November 2021 and are advised that earnings per share ('EPS'), headline EPS (‘HEPS’) and adjusted diluted
HEPS (‘adHEPS’) for the current period are expected to be within the ranges reflected in the table below, with
adHEPS no longer expected to decline by more than 20% relative to the prior period.
December 2020 December 2021 December 2021
reported expected range expected range
(cents) (%) (cents)
EPS 288.8 -35.0% to -45.0% 158.8 to 187.7
HEPS 261.1 -30.0% to -40.0% 156.7 to 182.8
Adjusted diluted HEPS 193.7 -10.0% to -20.0% 155.0 to 174.3
CONSTANT CURRENCY INFORMATION
The constant currency information contained in this announcement has been presented to illustrate the impact
of changes in the Group’s major foreign currency, the Australian dollar. In determining the constant currency
turnover and concession sales growth rate, turnover and concession sales denominated in Australian dollars for
the current year have been adjusted by the application of the aggregated monthly average Australian dollar
exchange rate for the prior period. The aggregated monthly average Australian dollar exchange rate is R11.09
for the current period and R11.65 for the prior period. The foreign currency fluctuations of WHL’s rest of Africa
operations are not considered material and have therefore not been applied in determining the constant
currency turnover and concession sales growth rate.
The constant currency information, which is the responsibility of the Group's directors, has been prepared for
illustrative purposes only and may not fairly present the Group’s financial position, changes in equity, cash flows
or results of operations.
The information contained in this announcement, including estimated financial information and constant
currency information, has not been reviewed or reported on by the Group’s external auditors.
Contact:
ReezaIsaacs@woolworths.co.za (Group Finance Director)
JeanineWomersley@woolworths.co.za (Investor Relations)
InvestorRelations@woolworths.co.za
Cape Town
20 January 2022
JSE sponsor and debt sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 20-01-2022 07:06:00
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