Coles’ profits take major hit in first report
Coles has reported a sharp drop in profit after starting life as a stand-alone company.
Net profit at the supermarket giant dropped 9.1 per cent to $1.43 billion for the year to June, it reported this morning.
The hit to the bottom line follows Coles being spun out of the Wesfarmers conglomerate into an independent company listed on the stock exchange and giving up fuel sales as part of a new deal with supplier Viva Energy.
Coles started trading on the stock market in late November.
Sales revenue for 2018-19 dropped 1.7 per cent to $38.4 billion.
But it rose 3.1 per cent to $35 billion when adjusted for the changes to fuel sales and excluding its hotel interests.
Core supermarket sales rose 3.2 per cent to $30.9 billion while earnings - a measure of profit - were up 2.2 per cent to $1.18 billion.
Coles said it finished the recently closed financial year having delivered its 47th consecutive quarter of supermarket like-for-like sales growth.
Like-for-like sales is a closely watched retail industry metric which takes into account the impact of supermarkets opening and closing.
Coles chief Steven Cain said the retailer had delivered a solid performance in the face of a rapidly changing and increasingly competitive retail landscape.
"It has been a year of substantial change for Coles following the successful demerger and ASX (Australian Stock Exchange) listing," he said.
"Consumer behaviours are changing faster than ever, we are heading into the most competitive period in Coles' history, and there are significant industry wide cost headwinds.
"With the return to profit growth in our core supermarkets division we have made a solid start to our four year transformation program."
Since taking up the helm of Coles, Mr Cain has struck a new fuel partnership with its supplier, sold its pubs and pokies business and Queensland and moved to build a number of robotic warehouses to serve supermarkets and online orders.
Coles declared a final dividend of 24c per share as well as a special dividend of 11.5c per share, both fully franked.