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Summary of the audited group results for the 52 weeks ended 27 June 2021, cash dividend declaration
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')
SUMMARY OF THE AUDITED GROUP RESULTS FOR THE 52 WEEKS ENDED 27 JUNE 2021, CASH DIVIDEND DECLARATION,
CHANGES TO THE BOARD OF DIRECTORS AND AMENDMENT OF POLICIES
FINANCIAL OVERVIEW
Turnover +9.1% to R78.8bn
Turnover and concession sales +9.7% to R85.9bn
Profit before tax +267.3% to R5.2bn
Adjusted profit before tax +110.7% to R4.6bn
Earnings per share +647.6% to 435.1cps
Headline earnings per share +212.5% to 374.4cps
Adjusted diluted headline earnings per share +102.9% to 341.6cps
Net borrowings (excluding lease liabilities) 91.0% reduction to R1.1bn
Dividend resumed at 66.0 cps in respect of second half earnings
COMMENTARY ON PERFORMANCE
The Group is pleased to report a strong operational and financial performance, notwithstanding the ongoing
impacts of Covid-19 over the year. Management actions to stimulate trade, manage margins, contain costs and
pay down debt have resulted in a pleasing set of results and a stronger balance sheet.
Group turnover and concession sales for the 52 weeks ended 27 June 2021 ('current year' or the 'period')
increased by 9.7% compared to the 52 weeks ended 28 June 2020 ('prior year' or 'comparable period') and by
5.9% in constant currency terms.
Trading conditions over the financial year are not directly comparable to the prior year, given the extensive
impact of the pandemic.
Trade across the Group continued to improve, notwithstanding uncertainty and business disruption exacerbated
by the delay of the Covid-19 vaccine rollout, further outbreaks and related lockdowns across both South Africa
and Australia. The improved trade performance coupled with strong working capital management and the
proceeds arising from the property sales in Australia resulted in positive cash flows and a significant
reduction in net debt across the Group.
Furthermore, the following factors contributed to the Group results and financial position:
- The sale of the Bourke Street Mens and Elizabeth Street properties in David Jones were completed in the
current year, resulting in net proceeds of A$120.0 million and A$504.4 million which were used to repay debt
and generated profits on sale of A$23.8 million and A$19.0 million, respectively;
- Covid-19 necessitated an assessment of the carrying values of assets, resulting in impairment charges of
R364 million (pre-tax); and
- The renegotiation of various leases, mainly in David Jones, resulted in lease exit and modification gains under
IFRS 16 of R591 million (pre-tax).
Earnings per share ('EPS') was 435.1 cps compared to 58.2 cps for the prior year, while Headline EPS ('HEPS') and
adjusted diluted HEPS increased by 212.5% and 102.9% over the prior period to 374.4 cps and 341.6 cps, respectively.
SOUTH AFRICA
South Africa's recovery from the Covid-19 pandemic has been set back by the onset of the third wave towards
the end of the fourth quarter. The consequential level 4 restrictions further dampened already-weak consumer
confidence, which is expected to limit discretionary spend. Furthermore, the recent civil unrest and related
widespread destruction of property in KwaZulu Natal and parts of Gauteng will also impact economic conditions
and consumer sentiment. We are pleased to announce that we have reopened two stores to date, with a further
eight expected to be opened within the next four weeks. Our Maxmead Distribution Centre has also resumed
full operations and we are continuing to work with our insurance assessors regarding our claims.
WOOLWORTHS FOOD
Turnover and concession sales for the current year grew by 6.9%, and by 5.7% in comparable stores. The
Woolworths Food business grew both market share and volumes during the period despite the high base set in
the prior year driven by stockpiling ahead of the first lockdown. Price movement was 5.2% with underlying
product inflation of 4.9% while net space increased by 0.6%. Sales in the second half of the current year
grew by 3.2%, and by 16.9% over a two-year period.
We continue to invest in price in key product categories to improve our value proposition, while remaining
focused on product quality, innovation and convenience. Online sales grew by 117.9% over the current year,
contributing 2.3% to our South African Food sales. This was further supported by the expanded Click-and-Collect
offering and the rollout of our on-demand delivery service, Woolies Dash.
Gross profit margin of 24.5% was 0.4% lower than the prior year as a result of further price investment and the
growing online contribution which were partly offset by volume rebates and distribution cost efficiencies.
Expenses, including additional Covid-19 related costs, grew by 6.1%. Adjusted operating profit increased by 3.9%
to R3 009 million, returning a post IFRS 16 operating margin of 8.0% for the current year.
WOOLWORTHS FASHION, BEAUTY AND HOME ('FBH')
Total revenue for the current year increased by 3.5% and by 4.2% in comparable stores, while sales in the second
half of the current year grew by 24.1% on the prior year's non-comparable base. The sales performance of the
Woolworths FBH business continues to be impacted by several factors, including the constrained environment,
the decline in demand for formalwear, as well as our initiatives to streamline our private label offerings and
rationalise unproductive space.
Price movement in FBH was 7.5%, and 5.3% in Fashion, due to the higher promotional activity in the prior year.
Online sales grew by 114.4%, contributing 4.1% to South African sales. The reduction in net space of 6.4% has
translated into improved trading densities.
Gross profit margin increased by 1.5% to 45.5%, as a result of a higher level of clearance in the base. Expenses
grew by 5.4%, with additional Covid-19 related costs, as well as UIF TERS and rent relief in the base. Adjusted
operating profit increased by 14.2% to R1 083 million, resulting in a post IFRS 16 operating margin of 8.4% for
the current year.
WOOLWORTHS FINANCIAL SERVICES ('WFS')
The Woolworths Financial Services book reflected a year-on-year increase of 0.7% at the end of June 2021 (2.0%
at 30 June 2020). The impairment rate for the 12 months ended 30 June 2021 was 5.3%, compared to 7.9% for
the 12 months ended 30 June 2020, reflecting the underlying strength of the book, as well as focus on customer
relief and collection. Net profit after tax for the year increased by 16.8% to R118 million.
AUSTRALIA AND NEW ZEALAND
In Australia, stronger economic fundamentals, improved consumer confidence and restrictions on international
travel, supported inward-focused consumption and buoyed retail spend. This was despite the intermittent snap
lockdowns across major cities and an extended three-month lockdown in the State of Victoria during the first
half of the current year and a further lockdown in the last quarter. Footfall in central business districts
and airport locations remains well below pre Covid-19 levels.
DAVID JONES ('DJ')
DJ turnover and concession sales over the period increased by 2.3% and by 0.9% in comparable stores, with
second half sales up by 17.1%. Online sales increased by 24.4% and contributed 17.3% to total sales for the
current year. In line with our stated intention of exiting unproductive space, trading space was further reduced
by 6.3%. Sales in our Elizabeth Street flagship store grew by 16.6% during the current year, notwithstanding the
lower footfall in the Sydney CBD.
Gross profit margin was 2.2% higher than the prior year, at 35.2%, due to reduced markdowns and an improved
inventory position. Expenses increased marginally by 0.3% on the prior year, with government support and rent
relief in line with the prior year, and additional costs from the leaseback of the Elizabeth Street and Bourke
Street Mens stores. Space reduction and other cost reduction initiatives contributed to lower costs. Adjusted
operating profit of A$84 million was 282% up on the prior year, resulting in a post IFRS 16 operating margin
of 4.0%.
COUNTRY ROAD GROUP ('CRG')
CRG delivered strong sales growth of 13.5% over the current year and by 15.3% in comparable stores, with
second half sales up by 39.5%. This result was underpinned by the robust performance of the Country Road brand
and through refreshed product offerings across all brands. Online sales increased by 30.7% and contributed
29.7% to total sales, while trading space was reduced by 2.8% for the current year.
Gross profit margin increased by 2.2% to 60.8% due to increased full-price sales. Expenses for the current year
reduced by 0.4%, mainly from store closures and a reduction in discretionary spend, as well as higher levels of
government support and rent relief in the current year compared to the prior year. Adjusted operating profit
increased by 158.3% to A$155 million, resulting in a post IFRS 16 operating margin of 14.7%.
OUTLOOK
The trading outlook in both regions is uncertain and will be impacted by further Covid-19 waves and resulting
lockdowns and restrictions, as well as the slow pace of vaccination in both regions. In Australia, current
lockdowns are significantly curtailing trade in our brick-and-mortar stores, while in South Africa, we are in the
midst of the third wave while the after-effects of recent civil unrest are also likely to be felt for some time.
Nonetheless, we have a stronger foundation and will continue to respond tactically to any immediate challenges,
whilst remaining steadfast in the execution of our longer-term objectives.
We would like to express our gratitude to all our employees across the Group, particularly those on the front
line, who courageously put the needs of their colleagues and our customers ahead of their own. We would also
like to thank our suppliers and partners for their commitment to our business, as well as our customers for their
continued support. The past year has again demonstrated the resilience of our business, driven by the passion
and commitment of all our people.
Any reference to future financial performance included in this announcement has not been reviewed or reported
on by the Group's external auditors and does not constitute an earnings forecast.
H Brody R Bagattini
Chairman Group Chief Executive Officer
Cape Town
25 August 2021
DIVIDEND DECLARATION
The Board of Directors ('Board') has taken a decision to declare a final gross cash dividend per ordinary share
('dividend') based on a pay-out ratio of 60% of second half headline earnings of the combined Woolworths South
Africa business segments (FBH, Food and WFS).
Notice is hereby given that the Board has declared a final gross cash dividend per ordinary share ('dividend') of
66.0 cents (52.8 cents net of dividend withholding tax) for the 52 weeks ended 27 June 2021, a 25.8% decrease
on the prior year's 89.0 cents per share. The dividend has been declared from reserves and therefore does not
constitute a distribution of 'contributed tax capital' as defined in the Income Tax Act, 58 of 1962. A dividend
withholding tax of 20% will be applicable to all shareholders who are not exempt.
The issued share capital at the declaration date is 1 049 977 230 ordinary shares. The salient dates for the
dividend will be as follows:
Last day of trade to receive a dividend Tuesday, 14 September 2021
Shares commence trading 'ex' dividend Wednesday, 15 September 2021
Record date Friday, 17 September 2021
Payment date Monday, 20 September 2021
Share certificates may not be dematerialised or rematerialised between Wednesday, 15 September 2021 and
Friday, 17 September 2021, both days inclusive. Ordinary shareholders who hold dematerialised shares will have
their accounts at their CSDP or broker credited or updated on Monday, 20 September 2021. Where applicable,
dividends in respect of certificated shares will be transferred electronically to shareholders' bank accounts on
the payment date. Where the transfer secretaries do not have the banking details of any certificated
shareholders, the cash dividend will be held in trust by the transfer secretaries pending receipt of the relevant
certificated shareholder's banking details after which the cash dividend will be paid via electronic transfer into
the personal bank account of the certificated shareholder.
CA Reddiar
Group Company Secretary
Cape Town
25 August 2021
CHANGES TO THE BOARD OF DIRECTORS AND BOARD COMMITTEES
As announced on SENS on 23 August 2021, Ms Zyda Rylands has resigned from the Board and as a member of
the WHL Risk and Compliance, Social and Ethics and Sustainability Committees with effect from 30 September 2021.
The Board expresses its appreciation to Ms Rylands for her valuable contributions as an Executive Director.
AMENDMENT OF POLICIES
Shareholders and noteholders are further notified that as part of the WHL Board's annual review of policies,
the Appointment of Directors' and Director Conflicts of Interests Policies were recently updated to align with
market practice. Copies of the updated Policies are available on the Company's website
https://www.woolworthsholdings.co.za/governance/policies
ABOUT THIS ANNOUNCEMENT
Statement and availability
This short form announcement, including the constant currency and pro forma financial information, is the
responsibility of the directors and is only a summary of the information in the full announcement. The provisional
audited Group Annual Financial Statements were approved by the Board on 25 August 2021, and the information
in this announcement has been correctly extracted from the audited Group Annual Financial Statements, upon
which EY have issued an unqualified report. The auditors' report does not necessarily report on all of the
information contained in this announcement. Shareholders and bondholders are therefore advised that, in order
to obtain a full understanding of the nature of the auditors' engagement, they should obtain an electronic copy
of the auditors' report, including Key audit matters, together with the accompanying Annual Financial Statements
from the Company's registered office, or on the Company's website:
https://www.woolworthsholdings.co.za/wp-content/uploads/2021/08/whl_annual_financial_statements_2021.pdf
Any investment decisions by investors and/or shareholders and/or bondholders should be based on consideration of
the full announcement, which has been published on SENS and available at:
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/WHLE/WHLFY21.pdf and on the Company's website:
https://www.woolworthsholdings.co.za/wp-content/uploads/2021/08/whlfy21.pdf
An electronic copy of the full announcement may be requested and obtained, at no charge, from the Group
Company Secretary at Governance@woolworths.co.za or the Head of Investor Relations at
InvestorRelations@woolworths.co.za The Final Analyst Presentation is also available on the Company's website.
DIRECTORATE AND STATUTORY INFORMATION
Non-executive Directors
Hubert Brody (Chairman), Zarina Bassa (Lead Independent Director), Christopher Colfer (Canadian),
Belinda Earl (British), David Kneale (British), Nombulelo Moholi, Thembisa Skweyiya, Clive Thomson
Executive Directors
Roy Bagattini (Group Chief Executive Officer), Reeza Isaacs (Group Finance Director), Sam Ngumeni, Zyda Rylands
Group Company Secretary
Chantel Reddiar
Registration number
1929/001986/06
LEI
37890095421E07184E97
Share code
WHL
Share ISIN
ZAE000063863
Bond Company code
WHLI
Registered address
Woolworths House, 93 Longmarket Street
Cape Town, 8001, South Africa
PO Box 680, Cape Town 8000, South Africa
Tax number
9300/149/71/4
JSE sponsor and debt sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Transfer secretaries
Computershare Investor Services Proprietary Limited
15 Biermann Avenue, Rosebank, 2196, South Africa
26 August 2021
Date: 26-08-2021 07:05:00
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