Australia’s leading retailer, Coles Group Limited (ASX: COL) has released its half-year report for FY 2019. For the half-year period, the company has reported total revenue from ordinary activities of $20,345 million which is 2.0% higher than the previous corresponding period (pcp). During the half year period, the company’s Statutory EBIT and profit from ordinary activities after tax decreased by 27.2% and 29.4% respectively, largely due to a $146 million restructuring provision presented as a significant item in the half-year financial report. Following the release of this news, the share price of the company decreased by 2.859 percent as on 19 February 2019 (AEST 2:31 PM).
For H1 FY 2019, the company has reported total sales revenue of $20.9 billion which is 2.6% higher than pcp. The Supermarkets sales revenue was $16.2 billion for the half year period which is 3.6% higher than pcp. In the Supermarkets segment, the company reported a Comparable sales growth of 3.0 percent in H1 FY2019. The Comparable sales growth was mainly driven by its ‘Coles Little Shop’ campaign and enhanced in-store execution.
In the Liquor segment, the company reported sales revenue of $1.7 billion for the half year period, including hotels which is 0.6 percent higher than pcp. In Q2 FY19, the trading in the Liquor segment was affected by the unfavourable weather which affected the transaction growth in various categories mainly in beer and ready-to-drink (RTD) categories. The Express segment reported sales revenue of $2.9 billion (including fuel) for the half-year period. The sales revenue is 1.8% lower than pcp, driven by lower fuel volumes.
In the half-year period, the Capital expenditure of the company increased by $125 million (excluding property divestments) due to the demerger process to make Coles a Separate ASX-Listed Company.
While providing the outlook for FY 2019, the company informed that it has reduced FY19 Guidance for net capital expenditure to $700 – 800 Mn due to the uncertainty over the timing of project commitments for the remainder of FY 2019. In the second half of FY 2019, the company will make the initial payments for Coles’ Supply Chain Modernization project. For the half year period, the company has reported leverage ratio of 0.8x. Further, the company’s Gross debt reduced to $1.6bn in the half year period due to Christmas trading period and timing of supplier payments.
During the half year period, the Net assets of the Company decreased by $578 million (17.8%) to $2,672 million in 1H FY 2019 as compared to pcp. The decrease was largely a result of the transfer of Kmart, Target and Officeworks (KTO) net assets to Wesfarmers, partly offset by seasonal increases in working capital balances.
Meanwhile, in the past one month, the share price of the company increased by 2.19% as on 18 February 2019. COL’s shares traded at $12.230 with a market capitalization of circa $16.79 billion as on 19 February 2019.
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