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52 Week trading update

Woolworths have released a 52 week trading statement this morning, group sales up a whopping 54.9 percent, if you exclude the David Jones contribution, group sales were up 12 percent. I suspect that it may take a while to normalise and get used to the greater contribution from Down Under, the business is going to have a 50/50 split between here and Australasia. Food sales grew 13.5 percent here locally, comparable store sales grew 6.6 percent. Local clothing sales were not exactly strong, 4 percent across comparable stores, 9.6 percent in total. Aussie and New Zealand was strong, Country Road sales in those two currencies grew 11.5 percent, an aggressive store space rollout inside of David Jones had a positive impact. The only negative I can see is that the impairment rate increased from 4.8 percent to 5.4 percent. A progressive dividend policy and a quality premium attached to the securities of this business should see this trading update as a neutral, perhaps a touch light. We do however think that this is the best of the retailers that we have access to here in the South African market, well run, brilliance in terms of quality and mix.


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