Woolworths Ltd.’s Fresh product approach and expanding penetration
Fresh product approach and expanding penetration: Woolworths Ltd.’s (ASX: WOW) 1H 17 revenue from continuing operations rose 2.6% while revenue from discontinued operations slipped by 11% against the prior corresponding period. Profit from continuing operations after tax attributable to members dropped down by 16.7%. On the other hand, there has been continued momentum in Australian Food with comparable sales growth of 1.9% in the half year and 3.1% in Q2’17. WOW also reported for improvement noticed for Voice of Customer, Voice of Team and Voice of Supplier. There has been progress in store renewal with 26 completed in HY17 and 41 Front End upgrades. The cash conversion during the first half has helped the group reduce its net debt compared to the prior year with the sale of the Fuel business expected to strengthen the balance sheet post completion. WOW declared an interim dividend of 34 cents per share, which is a drop of 22.7% on the prior year with the interim payout ratio being consistent with prior periods. However, a 1.5% discount will continue to be offered on the Dividend Reinvestment Plan (DRP). WOW recently launched South Africa’s first retail branded Marine Stewardship Council (MSC) certified tuna. Canned tuna has been a particular challenge as only 16% of the entire world’s tuna catch has met the certification requirements of the MSC. WOW launched an internal app to all its meat and fresh food departments that allows store managers to reject products that don’t look good enough to sit on the shelf, or that might spoil quickly, as part of a wider crackdown on wastage.
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