SYDNEY (AFX) - Australia's largest retailer, Coles Myer Ltd, said its first half net profit for the 26 weeks ended Jan 29 rose 10.5 pct to 484.5 mln aud, beating market forecasts centered on 446 mln aud.
Coles Myer, which last week announced the 1.4 bln aud sale of its Myer department stores to a consortium led by US-backed private equity firm Newbridge Capital, said it is on track to meet its full year net profit target of 769 mln aud, excluding profit from the sale of the Myer stores.
The full year profit guidance puts in the group in reach of its aspirational target for fiscal 2006, set four years ago ahead of significant change for the group.
It said finalisation of the Myer stores divestment is expected within the next few months, with the impact on overall guidance expected to be minimal for fiscal 2006.
Directors declared an interim dividend of 0.195 aud, up from last year's 16.25 aud interim payout.
Sales increased by 4.3 pct to 19.0 bln aud while on a comparable basis, net profit rose 16.6 pct, taking account of the impact of capital management changes.
The retailer said the food and liquor sales trend is expected to improve over time as the new customer initiatives in supermarkets gain traction.
For the non-food business, Coles Myer said the market environment is expected to remain very competitive.
Coles Myer chief executive John Fletcher said it was another very strong half for the group during which it more than doubled the profit and return on investment of four years ago.
'Coles Myer's earnings for the first half of fiscal 2006 were higher than for the whole of fiscal 2003, indicating just how far the group has come in a few short years,' Fletcher said.
(1 usd = 1.37 aud)
bruce.hextall@xfn.com
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