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Woolworths Limited (WOW)

Woolworths Limited (WOW)

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General Information
Company Name: Woolworths Limited
Stock Code: WOW
Website: www.woolworthslimited.com.au
Market Cap ($M): 31,752
Equiv. Shares (M): 1,231
 Research Report Available

Report price : $16.50 (inc. GST)
Research by : Aegis Equities Research

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Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
  $ 25.790 $ 25.560 $ 25.830 $ 25.520 $ 25.560 7,215,585 $ 0.230  0.900 %

Current Broker Consensus Recommendation more
Recommendation : Hold
Recommendation Date : 30th Jul 2010
12 Month Target Price (average) : $29.471
Brokers Surveyed : 10

Market Statistics
% of Market: 2.4905
% of Sector: 47.0284
Sector: Consumer Staple
Industry Group: Food & Staples Retailing
Industry: Food & Staples Retailing

Company Overview
Company Overview
Woolworths (WOW) is a retailer with primary activities in Supermarkets - Food & Liquor - these represent 84% of group sales and EBIT. Other operations include: BIGW discount department stores; Consumer Electronics through Dick Smith, Powerhouse and Tandy; Petrol through the Woolworths/Caltex alliance; and Hotels following an active acquisition program. Supermarkets are also operated in New Zealand trading under the Progressive Supermarkets banner which are being re-badged Woolworths.
Company History
WOW has grown organically and through acquisitions since early this century. The business base focuses on supermarkets (over 80% of sales and trading profits). Discount department stores provide over 10% of sales and profits. The balance is mostly generated by Dick Smith Electronics. WOW has also entered petrol retailing. The group has placed an increased emphasis on capital management, the benefits of which are being realised through improved shareholder returns.
Differentiating Factor
WOW has a strong market share, 30% of the Australian food, liquor and grocery market, and resultant substantial buying power. Big W has a clear market position and its "everyday low prices" approach has been well received by value-conscious customers.
Major Customers & Competitors
WOW's supermarkets target a broad spectrum of Australian consumers. Through its "everyday low prices" strategy, Big W appeals to price-conscious customers. Dick Smith Electronics targets the middle-income segment of the market . The major competitor is CML, an independent retailer (serviced by MTS). Competition in grocery retailing has increased through the expansion of Action and the entry of foreigners Aldi and Pick 'n Pay. HVN is a major competitor in a fragmented electronic retailing market.

Financial Summary
Year to Jun
NPAT
Rep $M
NPAT1
Adj $M
EPS
c
EPS chg
%
PER
x
PER rel
All Ords x
PER rel
Sector x
DPS
c
Yield
%
Franking
%
ROE
%
2007A 1,294 1,294 107.8 19.4 23.9 n/a n/a 74.0 2.9 100.0 24.5
2008A 1,627 1,627 133.6 23.9 19.3 n/a n/a 92.0 3.6 100.0 27.1
2009A 1,836 1,836 149.7 12.1 17.2 1.6 1.5 104.0 4.0 100.0 27.0
1NPAT is normalised by removing non-recurring items and goodwill. All the above statistics are derived from normalised earnings.

Peer Comparison
P/E (x) EPS Change (%) Dividend Yield (%)
Company Code Last Price Mkt Cap 07A 08F 07A 08F 07A 08F
Woolworths WOW $25.79 $31,752M 17.6097 15.6000 12.0900 10.2000 3.9500 4.4000
Wesfarmers Ltd WES $31.09 $31,251M 13.2751 20.9000 0.1000 -13.0000 4.8600 3.5000
Metcash Ltd MTS $4.45 $3,407M 14.0969 12.7074 11.3200 8.2700 5.7700 6.4000
AWB Limited AWB $0.99 $809M 4.9793 10.0853 -27.2779 -50.6280 0.0000 0.0000
Woolworths Notes WOWHB $98.10 $588M n/a n/a n/a n/a n/a n/a

Share Price Returns
3 Months (%) 6 Months (%) 12 Months (%)
WOW -4.8300 2.9800 -1.7200
Sector 1.1246 5.1572 4.9542
Market -6.7540 -1.9465 7.4232

Ratio Comparison
Year WOW Sector Market
P/E (x) FY07 23.9 n/a n/a
FY08 19.3 n/a n/a
Yield (%) FY07 2.9 n/a n/a
FY08 3.6 n/a n/a
EV/EBIT (x) FY07 (189115.3) n/a n/a
FY08 (157107.3) n/a n/a
EV/EBITDA (x) FY07 (147920.0) n/a n/a
FY08 (125162.0) n/a n/a

Directors
Name Position
Dr R Deane Director
D J Grady Director
L M L`Huillier Director
J Strong Chairman
J Astbury Director
A Watkins Director
I Macfarlane Director
M Luscombe MD & CEO
T Pockett Director

Management
Name Position
M Luscombe MD & CEO
T Pockett CFO
Mr P Smith GM Supermarkets
Mr M Hamnet GM Big W, Director Gen Merchandise
Mr G Foran GM Dick Smith/Tandy

Substantial Shareholders
No substantial shareholders registered

Calendar of Events
Date Event
23-Apr-2010 Dividend Date Payable for Half Yearly Result (53c 100% franked)
26-Mar-2010 Dividend Record Date for Half Yearly Result (53c 100% franked)
22-Mar-2010 Dividend Ex-Dividend Date for Half Yearly Result (53c 100% franked)
26-Feb-2010 Reporting Date for Half Yearly Result
26-Nov-2009 AGM Date for Final Year Result


Data supplied by Aegis Equities Research Pty Limited (ACN 085 293 910).
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