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Woolworths Group
Woolworths Group (ASX:WOW) is a diverse group of retail business on a journey to becoming a purpose-led organisation. It has its operations in diversified segments namely Australian food, New Zealand food, endeavour drinks and a portfolio of hotels and liquor outlets.
Key Metrics: The revenue for FY 2018 is $56.7 billion, a rise of 3.4% from FY 2017. The growth was majorly contributed by the Australian food and endeavour drinks segment. EBIT is up 9.5% from FY 2017 largely driven by the Australian food segment. The cash flow from operating activities before interest and tax was $3,775 million. This is due to the improvement in EBITDA of 3.8%. The cash realisation ratio was 101% with lower net investment in inventory compared to last year and the current ratio for the company is marginally down to stand at 0.78x for FY 2018 as compared to 0.79x in FY 2017, however it is in line with the industry median. The net repayable debt declined to $1219 million on the back of strong cash generation during FY 2018. The company is currently trading at a PE multiple of 22.41x, lower in comparison with its peers in the industry.
Going forward in FY19 productivity improvements will remain a key focus for the company. It will continue to invest in the online and convenience offerings including scaling up the business across Metro stores. The company will focus on improvement in the online process and app-based applications to enhance payment processes. The stock is currently trading at $29.680.
Coles Group Limited
Coles Group Limited (ASX:COL) is a full-fledged retail company. It is engaged into the distribution of consumer products like groceries, household goods, liquor, fuel and financial services etc through its store network and online platforms.
The revenue of the group stood at $66,883 million in FY18 as compared to the restated numbers of $64,913 million in FY17, up by 2.0% Y-O-Y. However, for the first quarter 2019, the sales stood at $9,838.0 million as compared to $9,370.0 million, an increase by approx. 5.0% as compared to the previous corresponding period. The net profit after tax stood at $2,604 million in FY18 as compared to $2760.0 million in FY17 restated.
In FY19 the Wesfarmers will retain a 15 per cent shareholding in Coles and will support investments in flybuys. Wesfarmers Limited announced (March 16, 2018) its intention to undertake a demerger of Coles Group Limited owner of its Coles supermarkets, liquor, convenience and financial services businesses, to create a separate company listed on the Australian Securities Exchange.
Going forward in 2019 financial year, the company will remove single-use plastic bags from all check outs across Australia and New Zealand.
The stock of Coles is currently trading at $11.760 with a market capitalisation of $15.86 billion. It has yielded a YTD return of 1.54% till date.
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