As widely expected supermarket chain, Coles Group has had a very profitable COVID-19 crisis and so will its shareholders.
Coles’ said on Tuesday that earnings before interest and tax (EBIT), excluding a range of significant items, rose 4.7% to $1.76 billion, much better and stronger than 2018-19’s 8.3% dip (which was complicated by the spin-off from Wesfarmers in November 2018).
The retailer declared a total dividend for the year of 57.5 cents a share, an increase of more than 60% from last year, payable on September 29. The final was 27.5 cents a share, up 14% from a year ago.
That’s a bit misleading as the 2018-19 result was disrupted by the demerger.
That financial year is not directly comparable due to it containing five months of contributions from the Kmart, Target and Officeworks business when the supermarket was still owned by retail conglomerate Wesfarmers.
The company also sold or restructured its hotels and fuel businesses throughout 2019, which are no longer in the 2020 financial year.
To reflect the changed nature of its ongoing operations, Coles’ included its ‘retail results’ which excludes all those non-core one-offs.
On this basis, net profit after tax for the full-year grew 7.1% to $935 million. On a statutory level, which includes the various former operations, Coles’ profit after tax declined 31.8%.
The company said sales for the 12 months jumped 6.9% to $37.4 billion, thanks to a 6.8% rise in its core Australian supermarkets to a record $33 billion.
Comparable sales for supermarkets for the year to June grew 5.9%.
Coles, along with rival supermarket Woolworths, has been one of the best-performing businesses during the coronavirus pandemic, with virus-fuelled panic buying of food driving sparking a solid rise in sales for both giants (and for a host of other retailers as well, as we have seen from the likes of JB Hi-Fi, Kogan and Temple and Webster).
Coles shares though dipped 1.1% to $18.71 in another example of selling of investors selling on the result and taking profits.
