Coles maintains steady interim dividend amid profit dip

Company News

by Glenn Dyer

The country's second-largest supermarket business, Coles (ASX:COL), has announced a steady interim dividend despite a slight dip in profit for the 27 weeks ending December 31.

The company stated it would pay shareholders 36 cents a share for the interim period, with profit from continuing operations decreasing by 3.6% to $594 million. Sales from continuing businesses, however, saw a robust increase of 6.8%, reaching $22.216 billion.

EBIT, considered the prime measure of retailing performance, experienced a 5.1% decline to $1.057 billion compared to the previous year. Yet, Coles emphasized its underlying measures, indicating a 0.5% rise in EBIT, a 4.1% increase in group EBITDA, and a 0.3% uptick in group net profit after tax.

Supermarkets grocery sales surged by 4.9% to $19.778 billion, while liquor sales saw a modest 1.8% rise to $1.988 billion. Notably, other revenue of $450 million stemmed from a supply deal with Viva Energy.

Despite a slight slowdown in comparable sales growth to 4.6%, Coles achieved a significant milestone with group EBIT from supermarkets surpassing the billion-dollar mark for the first time, reaching $1.007 billion. Liquor EBIT also saw a notable 5% increase to $84 million.

The company attributed the sales increase to growth across all segments, particularly supermarkets and liquor. Additionally, Coles highlighted its efforts to combat stock loss, implementing technologies like Skip Scan and Smart Gates in numerous stores.

CEO Leah Weckert expressed satisfaction with early wins from their renewed strategy, including improved availability metrics and cost-saving initiatives. Coles also noted a moderation in supermarkets price inflation and substantial eCommerce sales growth of 29.2% to $1.8 billion.

Overall, Coles remains optimistic about its performance despite the challenges posed by the market and operational factors.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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