Financial Times: Woolworths growth 'not dependent on bid': “admitted Coles' move into petrol retailing, where it has teamed up with Shell, had hit Woolworths but said the impact would be short-lived” (ShellNews.net)
By Virginia Marsh in Sydney
Published: August 24 2004
Woolworths, Australia's second-biggest retailer, said yesterday it aimed to lift profits by up to 15 per cent this year and that its growth plans were not dependent on the success of its bid for the country's largest pubs group.
The Sydney-based group, which runs Australia's largest supermarket chain, early last month launched a A$970m (US$700m) bid for Australian Leisure and Hospitality, the pubs and gaming business spun off by Foster's last year.
ALH has rejected the bid as too low, a move upheld by an independent valuer. But Woolworths, which is bidding in partnership with entrepreneur Bruce Mathieson, has so far held off from raising its offer.
"Our growth plans are not dependent on ALH," said Roger Corbett, Woolworths chief executive. "If it's not a reasonable number for our shareholders, I can assure you we will walk away."
His comments came as the group unveiled a better than expected 13 per cent increase in net profits to A$688m for last year and said it expected earnings to grow 10-15 per cent this year in spite of stiffer competition from Coles Myer, its main rival.
Coles, following Woolworths' lead, has moved into petrol retailing in the past year and is also reaping the benefits of a radical overhaul under John Fletcher, the former Brambles chief executive.
Mr Corbett admitted Coles' move into petrol retailing, where it has teamed up with Shell, had hit Woolworths but said the impact would be short-lived.
"The impact will diminish during the coming year as a further 110 Woolworths/Caltex joint branded sites are rolled out and the 12-month anniversary of [Coles'] petrol openings passes," he said.
"As we continue to expand the sites the resultant increases in supermarket sales is encouraging," he said, adding that 470 sites would be optimal for the group.
Woolworths, which also owns electronics and general retail chains, offers supermarket customers discounts on petrol purchases.
It said it would re-examine capital management plans once the outcome of its bid for ALH was known.
The shares rose 16 cents to A$12.12.