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Category: Markets / Retail

Masters' collapse drags Woolworths into billion-dollar hole

Friday, 26 Feb 2016 06:40:53 | Rebecca Hyam

Woolworths has appointed a new chief executive. (AAP)

Woolworths has unveiled a loss of $973 million for the six months to January 3 and announced the appointment of a new chief executive.

The financial result represents the grocery giant's first loss since Woolworths was listed on the Australian stock exchange 23 years ago.

Woolworths' interim loss was affected by a bigger-than-expected $1.9 billion after-tax write-down in the value of its failed home improvement business, Masters.

Last month, Woolworths announced it would exit the loss-making Masters business, by selling or winding up the stores, after buying out its US partner, Lowe's.

Woolworths has today appointed its current Food Group managing director, Brad Banducci, as its new chief executive.

In a statement, the company said it had undertaken a rigorous international search to find the best person to rebuild the business and return it to sustainable growth.

Mr Banducci is understood to have been the only internal applicant for the role.

Most analysts were anticipating the appointment of an external candidate, who could bring a change of culture to the organisation and reinvigorate its supermarket business.

Woolworths' underlying net profit fell by 33 per cent in the half-year to $926 million, which was in line with the company's previous forecasts of $900 million to $1 billion.

Total sales for the half year fell by 1.4 per cent to $32 billion.

Comparable sales in Woolworths's food and liquor divisions fell by 0.8 per cent to $22.3 billion in the six month period, as the retailer reduced grocery prices to try to win back shoppers from rivals Coles and Aldi.

Woolworths has also cut its interim dividend by 34 per cent to 44 cents per share.

That fell short of the market's forecast for a 48 cents per share dividend.

AustraliaPlus


 

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