Woolworths Group Limited (ASX: WOW) is a retail company with operations across Australia and New Zealand. Its diverse businesses include general merchandise consumer stores and supermarkets as well as procurement of food, liquor, and other products. Some of its well-known brands are Countdown, BWS, Dan Murphy’s, Woolworths and BIG W. Besides, the company also operates hotels, pubs, and gaming facilities.
Snapshot of the business as of 31 December 2018 (Source: ASX release dated 1 April 2019)
Of late, Woolworths has come under consistent pressure to quit its pubs and pokies business, with one of its biggest shareholders and well-known slot machine operator, ALH Group. Since, ALH Group operates over 12,000 pokie machines across its 323 pubs and clubs, and Woolworths also holds a majority stake in ALH, this makes the retailer a target of the anti-gambling campaigns.
As per the market experts, Woolworths is the one of most influential shareholders and investment powerhouse, also Perpetual Investments has been emphasising that association with gambling businesses was a threat to the company’s brand and reputation in the community.
The company’s FY19 Third Quarter Sales Results for the 13-week period to 31 March 2019 were disclosed to the market on 2 May 2019. Woolworths recorded sales momentum across all its reportable segments during the concerned period.
Source: Sales Results for the Third Quarter 2019
For the Australian Food segment, the Easter-adjusted sales were up 4.7% to $ 10,017 million (pcp: $ 9,624 million) on account of lower deflation and favourable weather conditions. In addition, the Easter-adjusted sales for Endeavour Drinks segment was also higher (6.4%) to $2,072 million (pcp: $ 1,999 million) and so were the sales of New Zealand Food segment (up 6.5%).
BIG W business segment recorded improvements in all its customer metrics with Store-controllable VOC rising to 80% in the month of March 2019, highest since the launch of ongoing survey in May 2018. The Easter-adjusted sales were up 5.6% while the Easter-adjusted comparable sales increasing 7.4% driven by item per basket growth, increase in the sale of reusable bags, an excellent performance by the Everyday, Leisure and Home businesses. The Hotels sales growth was also strong driven by Bars and Food. The Group added three new Hotels acquired during the quarter to its portfolio and subsequently 327 new venues at the quarter end.
Overall, the Group’s recorded an online sales growth of 35.1%.
During the March quarter, the Group also completed the sale of Woolworths Petrol business to EG Group as announced on 1 April 2019 upon the receipt of confirmation from the Foreign Investment Review Board (FIRB). The proceeds from the transaction were returned to the shareholders via a $ 1.7 billion off-market buy-back that opened on 16 April 2019. The buy-back Market price has been announced as AUD 33.6434 on 24th May 2019. The final Buy-Back price and any scale back are expected to be announced on Monday, 27 May 2019.
With a market capitalisation of around AUD 44.28 billion and ~ 1.32 billion outstanding shares, the WOW stock closed (on 24 May 2019) at AUD 32.7, dipping 2.708% with ~ 8.71 million shares traded.
The Group’s Directors Siobhan McKenna and Gordon Cairns recently earned an additional indirect interest in the company upon 45 and 413 ordinary shares at a value consideration of $ 30.0990 and $ 30.0990 respectively.
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