Woolworths Share Price Turnaround Isn’t Over Yet

Woolworths Ltd [ASX:WOW] jumped more than 1.1% this morning, to $27.35 per share.

Annual report helps the Woolworths Share Price

The giant retailer revealed their annual report today.

There were some big improvements from last year.

Revenues were up 3.7%, to $55.5 billion. Profits also improved, from a $2.3 billion loss to a $1.59 billion profit.

Even if you forget the $3.1 billion loss in FY16, Woolworths’ FY17 profits still showed a 94.3% improvement. Woolies almost cut their short-term borrowings in half and reduce long-term borrowings by 28%.

Thanks to higher earnings, Woolworths generated $1.2 billion in free cash flow. And they also paid a final dividend of 34 cents per share. It brings their total dividend payment for FY17 to 84 cents, up 9.1%.

What now for Woolies?

Woolworths’ work is far from over. Now that they’ve gotten rid of their home improvement business, they still have one more problem to deal with —– Big W.

As reported by The Australian Financial Review:

Distracted by the exit from loss-making Masters and efforts to revive its core supermarkets business, Woolworths is belatedly turning its focus to Big W which former Perpetual and 452 Capital money manager Peter Morgan has called a “basket case”.

Big W posted a worse-than-expected loss before interest and tax of $150.5 million for the year. The latest in a string of executives brought in to fix the business is David Walker who had been acting in the role since November.

Woolworth also managed to increase its full-year dividend 91%, to 84 cent per share. It gives the giant retailer a dividend yield of a little over 3%.

Can it continue to grow dividends over time?

Even if it can’t, there may be other stocks on the ASX that could potentially. Like these five dividend stocks trading on the ASX right now.


Härje Ronngard,

Junior Analyst, Money Morning

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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