Retailer Woolworths Holdings Limited (WHL) on Wednesday (31 August) published its results for the 52 weeks ended 26 June 2022, showing muted turnover, buoyed by strong online sales growth.

Turnover grew 1.7% to R80.1 billion, while turnover and concession sales were up 1.4% to R87 billion. Group turnover increased by 2.6% in constant currency terms, with second-half sales up by 5.6%. Online sales grew by 16.4%, contributing 12.4% to the group’s total turnover and concession sales over the year.

Headline earnings per share were up 6.5% to 398.9 cents per share, and adjusted diluted headline earnings per share were up 9.7% to 374.9 cents per share.

Adjusted operating profit declined by 3.9% to R2.9 billion, returning an operating profit margin of 7.3% for the year, compared to 7.9% in the prior year.

The board at Woolworths declared a final dividend of 149 cents, a 125.8% increase on the prior year’s 66 cents. This brings the total dividend for the year to 229.5 cents, a 247.7% increase from the prior year’s total dividend of 66 cents.

“I am very pleased with the Group’s performance. We have delivered the healthiest balance sheet in almost a decade, double-digit profit growth supported by strong momentum in Australia and signs of the turnaround of FBH, and the return of excess cash to our shareholders,” said WHL Group CEO, Roy Bagattini.

“I firmly believe that we have proven ourselves to be a resilient organisation that is focused on formulating clear strategies and executing against them. We are on track to rebuild our financial credentials, drive long-term value creation, and restore our business to its rightful place in the hearts and minds of all our stakeholders.”

Turnover in the group’s Fashion Beauty and Home business grew by 5.4%, with full-priced sales growing by 8.8%, supported by improved product resonance and market share gains in our ‘must win’ categories.

Trading space declined by 4.5%, supporting a double-digit increase in trading densities, it said. Online sales grew by 13.2% and contributed 4.4% to South African sales. Adjusted operating profit increased by 48.7% to R1 610 million, resulting in an operating margin of 11.9% for the year, compared to 8.4% in the prior year.

“Our Food business grew turnover by 4.2%, reflecting the impact of the high Covid base and the return to out-of-home consumption, an increasingly competitive backdrop, and low product inflation across key categories,” Woolworths said.

Space grew by 1.8% relative to the prior year. Online sales increased by 45.4%, contributing 3.2% of South African sales, assisted by the further rollout of the group’s on-demand online offering.

The Woolworths Financial Services (WFS) book reflects a year-on-year increase of 6.8% at 30 June 2022, driven by demand and a recovery in post-Covid spending, the group said. ROE increased to 18.4%, from 13.6% in the prior year.

Looking ahead, the retail giant said that the global macro environment remains volatile, with rising inflation and interest rates posing a headwind to the outlook for economic growth.

“Whilst this impact on Australian consumer spend should be somewhat mitigated by strong household balance sheets, and high employment, South African consumption faces high unemployment and severe energy shortages.

“Global supply chain uncertainties and elevated freight costs have been exacerbated by recent global events, placing significant upward pressure on raw material availability and input pricing.

“Notwithstanding this backdrop, the current momentum of our apparel businesses is expected to continue, and our food business is expected to deliver a solid underlying performance whilst investing in key initiatives.