Endeavour Drinks,which includes BWS and Dan Murphy's,posted a 2.3 per cent rise in sales. However,earnings before interest and tax (EBIT) dropped 8.2 per cent in what the company described as a"subdued"trading environment.
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In July,Woolworthsannounced it would restructure and demerge or otherwise sell its Endeavour Drinks and ALH hotels business by 2020. On Thursday at its full-year results it affirmed the restructure would be completed by early February,with a shareholder vote at the company's annual general meeting on December 16.
The company also revealed the potential net proft after tax of the merged group would be $418 million based off 2019's financials including a $1.9 billion debt owed to Woolworths,which will be restructured and refinanced externally prior to the 2020 demerger.
Mr Banducci said the company was expecting costs of the demerger to be around $275 million.
"We're looking to make two simpler and more focused organisations,and we feel confident and optimistic we will,"he said.
Often these businesses will try to tart them up and throw everything at it before they demerge,but that certainly doesn't seem to be the case.
Will Culbert,Contact Asset Management
Investors were looking for an improvement in conditions in the liquor division prior to the demerger,but Will Culbert,portfolio manager at Woolworths shareholder Contact Asset Management,said the negative consumer environment had prevented any such boost.
"Often these businesses will try to tart them up and throw everything at it before they demerge or do a trade sale,but that certainly doesn't seem to be the case here,"he said.
"It's one of the worst[liquor] results from a growth perspective as long as I can remember,but that's possibly just a reflection on the current softness in the consumer."
Looking broadly at the Endeavour proposal,Mr Culbert was keen for clarity on what the clear outcome for shareholders would be,though noted the transaction"made sense".
Cautious optimism about future
Discount department store Big W also suffered a loss of $85 million,an improvement on last year's $110 million loss,and comparable sales also increased 5.35 per cent.
Mr Banducci remained"agnostic"on if Woolworths would look to sell or otherwise offload the department store chain in the future,but noted it"does need to be a profitable business".
While the company was reluctant to provide future guidance,Mr Banducci said Woolworths remained well-placed to weather future downturns,flagging he was"cautiously optimistic"amid an unfriendly retail environment.
"Many of our customers[are] experiencing cost of living pressures despite record low interest rates and recent tax stimulus,and input cost pressures remain for retailers and suppliers alike,"he said.
Woolworths declared a fully franked final dividend of 57 cents,bringing the full-year dividend to 102 cents,payable on September 30.