AUSSIE CHAIN SHOWS STRONG RESULTS IN TOUGH TIMES

SYDNEY, Australia (FNS) -- Woolworths here said it boosted profits by 12% to $167 million on sales of $4.9 billion (up 11%) in the half-year ended Jan. 7.The company, Australia's largest food retailer, said the improved results came despite relentless competitive pressures, a weaker Australian dollar and the impact of the new goods and services tax.Roger Corbett, Woolworths' chief executive officer,

SYDNEY, Australia (FNS) -- Woolworths here said it boosted profits by 12% to $167 million on sales of $4.9 billion (up 11%) in the half-year ended Jan. 7.

The company, Australia's largest food retailer, said the improved results came despite relentless competitive pressures, a weaker Australian dollar and the impact of the new goods and services tax.

Roger Corbett, Woolworths' chief executive officer, said the company continues in good health, with sustained sales and market share growth.

"Earnings before interest and tax grew faster than sales assisted by the cost savings of Project Refresh, and earnings per share grew faster than EBIT, helped by good balance sheet and capital management," he said.

Corbett called the result "particularly satisfactory given the challenges faced by the business, notably in the first quarter of the year."

He said "the combination of the implementation of GST, the weakness of the Australian Dollar, and the weakness of the soft goods market slowed progress in the first quarter. These factors were successfully managed as the half-year progressed."

He also said the company has identified a variety of opportunities for acquisition and further growth, an oblique reference to the possibility of the purchase of some outlets from the third-ranking supermarket chain, Franklins.

The company has also announced that its chairman, John Dahlsen, intends to step down. He will be succeeded by James Strong.

Corbett said the beginning of the half-year saw considerable challenges to Woolworths' supermarket business, but as the half-year progressed, "the business settled down and the performance of profitability in exceeding sales growth, assisted by continued costs savings, was very pleasing."

Naum Onikul, chief general manager supermarket operations, said sales were strong in most states, particularly New South Wales. Sharper pricing improved market share by 0.6% to 25% of the Australian food, liquor and grocery market.

"We have seen a pleasing acceleration in our comparable-supermarket sales growth to 5.1%," he said.

During the half-year 17 supermarkets were added to the chain to bring it to 602.

Looking ahead, the company anticipated a degree of slowdown in the second half-year. "However, we are yet to see any reduction in our overall business past the end of the half-year, with excellent sales growth recorded in January and February to date.

"Given a continuation of current trading conditions, we remain confident of achieving a high single-digit sales increase and a low double-digit profit increase," Woolworths added.