South African retailer Woolworths posted a 25% rise in full-year profit, helped by a recovering demand in Africa’s biggest economy, and said it expects a slow recovery ahead.
Woolworths, which sells upscale food and clothing, said on Thursday headline earnings per share rose to 157,2 cents in the year to end-June from 126 cents a year last year.
Headline EPS is the main profit gauge in South Africa and strips out certain one-off items.
Woolworths, which also operates in Australia, said it expects a slow improvement in both South Africa and Australia.
The Cape Town-based company said revenue for the year rose 8,2% to R23,7-billion.
Shares in Woolworths have gained more than 30% so far this year, outpacing a more than 2% decline in Johannesburg’s all-share index.
Investors have been snapping up Woolworths and other South African retailers on hopes that decades-low interest rates, the Soccer World Cup and a tentative economic growth would ease strain on consumers.
But these benefits are tempered by high household debt levels and job losses.
South Africa’s retail sales rose for a sixth consecutive month in June, helped by World Cup spending, but the increase was weaker than expected.
Woolworths’s larger rival Shoprite, which this week posted a 16% rise in full-year profit, gave a cautious 2011 outlook, citing job losses and debt levels. — Reuters