Woolies profits from deal

Woolworths reported a 21% rise in first-half profit mainly as a result of contributions from its recent acquisition in Australia.

Woolworths said headline earnings per share totalled 164.2c in the six months to the end of December, compared with 135.7c a year earlier. Headline earnings per share, the primary measure of profit in South Africa, strips out certain one-time items.

The results were boosted by the purchase in August of Australian fashion retailer Witchery Group in a $181-million deal to expand into the Asia-Pacific region.

Woolworths said total sales rose 18% to R16.7-billion, with its Australian business delivering a 55.6% surge in sales.

South African retailers' shares have tumbled in recent weeks on growing worries that consumers are too heavily indebted to sustain recent levels of sales growth.

Woolworths is expected to fare better than rivals such as Truworths and Shoprite because it serves the more resilient highincome consumers in South Africa.

"We expect sales growth to be broadly in line with the first half," the company said.