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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Woolworths | LSE:WLW | London | Ordinary Share | GB0030738610 | ORD 12.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.22 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 6024D
Woolworths Group PLC
17 September 2008
Woolworths Group plc
Interim Results Announcement
for the 26 weeks ended 2 August 2008
Financial Performance
Group sales down 3.0 per cent to £1,107.0 million
Woolworths Retail like-for-like sales down 3.2 per cent
Woolworths Retail gross margin down by 112 basis points
Half-year adjusted loss excluding profits from property transactions £90.8 million (£64.3 million in first half 2007/8)
Profits from property transactions £15.8 million (£5.1 million in first half 2007/8)
Loss before taxation of £99.7 million (£63.8 million in first half 2007/8)
No interim dividend
Operating Performance
Woolworths Retail launch of Price Drop campaign
EUK renewed contract to supply Wm Morrison
Integration of former THE business into EUK and Bertram completed
Developments since 2 August
Woolworths Retail like-for-like sales first six weeks of H2 up 0.4 per cent
Deterioration in the credit insurance market may increase the Group's working capital requirements but the Board believes that the Group
can continue to operate within its existing borrowing facilities
Steve Johnson, new CEO, appointed 1 September 2008 - strategic review of Woolworths Retail already underway
Richard North, Chairman of Woolworths Group plc, said:
"For the first half of the year EUK and 2 entertain are performing ahead of our expectations, while Woolworths Retail manifestly is not.
However, the Board believes that the strength of our entertainment businesses provides a solid platform of profitability from which the
turnaround of the retail business can be based.
"The Board of Woolworths is delighted that Steve Johnson has now started as Chief Executive. Although he has been in the job for less
than a month he has already demonstrated the strategic and operational skills and the energy needed to help take Woolworths to the next
stage of its development."
Steve Johnson, Chief Executive, said:
"I took this job because I am convinced that there is space on the high street for a successful home-based variety store offering great
value and convenience. My first weeks in the job have only reinforced that view and shown me that Woolworths has a core of strong,
profitable stores, a great retail brand and many very committed people who want to succeed.
"It is too early for me to have a fully developed strategy. That plan is in progress but still some way from completion and we will
update investors as soon as possible.
"Right now, this business does not require lots of new strategic initiatives, it requires a good dose of basic shop keeping and
attention to the detail of retailing. Everyone in Woolworths is clear that our first priority - in all parts of the Group - is delivering a
successful Christmas for our customers."
The Company's Interim Report for the 26 weeks to 2 August 2008 is published today on its website: www.woolworthsgroupplc.com
For further information contact:
Stephen East, Group Finance Director 020 7479 5179
Susanna Voyle, Tulchan Communications 020 7353 4200
1. OVERVIEW OF FINANCIAL PERFORMANCE
The adjusted loss, excluding profits from property transactions, increased from £64.3 million to £90.8 million mainly reflecting tougher
conditions in Woolworths Retail and increased interest costs. Profits from property transactions in the period reflect the disposals of the
leases of three stores to Waitrose; the disposal of the fourth store is expected to complete later this month. The adjusted loss removes
from the statutory IFRS figures the effect of taxation, exceptional items, fixed rental uplifts and amortisation of certain intangible
assets. We have also taken the opportunity to show adjusted losses both including and excluding profits from property transactions in order
to give greater visibility to this important source of value for the Group. References to adjusted losses/profits exclude profits from
property transactions unless stated to the contrary. Details are set out in the tables below.
Adjusted Segmental Analysis
26 weeks to 2 August 2008
Entertainment
Wholesale and
Retail Publishing Unallocated Interest Total
£m £m £m £m £m
Reported loss before taxation (72.5) (3.3) (5.3) (18.6) (99.7)
Adjust for: exceptional items 17.4 1.7 0.4 - 19.5
Loss before exceptional items (55.1) (1.6) (4.9) (18.6) (80.2)
Add back: amortisation of - 3.8 - - 3.8
certain intangible assets*
Add back: fixed rental 1.4 - - - 1.4
uplifts**
Adjusted (loss)/profit
including profits from (53.7) 2.2 (4.9) (18.6) (75.0)
property transactions
Less profits from property (15.8) - - - (15.8)
transactions
Adjusted (loss)/profit (69.5) 2.2 (4.9) (18.6) (90.8)
Adjusted Segmental Analysis
26 weeks to 4 August 2007
Entertainment
Wholesale and
Retail Publishing Unallocated Interest Total
£m £m £m £m £m
Reported loss before taxation (40.9) (9.0) (5.1) (8.8) (63.8)
Adjust for: exceptional items (8.5) 7.6 - - (0.9)
Loss before exceptional items (49.4) (1.4) (5.1) (8.8) (64.7)
Add back: amortisation of - 3.8 - - 3.8
certain intangible assets*
Add back: fixed rental 1.7 - - - 1.7
uplifts**
Adjusted (loss)/profit
including profits from (47.7) 2.4 (5.1) (8.8) (59.2)
property transactions
Less profits from property (5.1) - - - (5.1)
transactions
Adjusted (loss)/profit (52.8) 2.4 (5.1) (8.8) (64.3)
* Amortisation of certain intangible assets arising on consolidation, namely underlying rights, customer relationships and
trade names
** Net of £2.0 million benefit from leases assigned (£2.2 million benefit first half of 2007/8)
2. OPERATING REVIEW
While our Entertainment Wholesale & Publishing businesses delivered steady performances in the first half of the year, the Group's
overall results were particularly disappointing, due to poor performance from the Woolworths Retail business. Group sales for the half-year
were down by 3.0 per cent to £1,107.0 million and the half-year Group adjusted loss increased from £64.3 million to £90.8 million.
Retail sales for the first half were £660.7 million compared to £695.6 million in the first half of 2007/8, a decline of 5.0 per cent in
absolute terms and 3.2 per cent on a like-for-like basis. This represented reduced sales across many categories. This sales performance,
together with an underlying gross margin down 112 basis points on the same prior year period, resulted in an adjusted operating loss of
£69.5 million (loss of £52.8 million in first half 2007/8). In addition, the operating profit from disposal of three store leases to
Waitrose was £15.8 million in the period, compared with profits from property transactions of £5.1 million in the previous first half.
Entertainment Wholesale & Publishing's sales to third parties were essentially flat at £446.3 million compared to £445.6 million in the
previous comparable period, translating into an adjusted operating profit of £2.2 million (£2.4 million 2007/8).
Entertainment Wholesale & Publishing
Entertainment Wholesale
As previously reported, EUK's management was strengthened at the end of last year and since completing the integration of Bertrams and
THE, attention has been firmly focused on the development of its customers' businesses whilst driving efficiency across its own operations.
Total sales in the first half increased by 0.3 per cent, predominantly as a result of growth in sales to Woolworths Retail, whilst external
third party sales showed a slight decrease of 1.0 per cent, driven by changes in the customer base and the impact of year-on-year new
release timings. The first half adjusted operating loss of £5.8 million, compared with a £5.5 million loss in the prior year, was driven by
this sales variance, changes in customer mix and a significant sales increase of lower margin Games hardware.
EUK's full-year outturn is expected to be well ahead of the prior year, particularly due to the absence of the transition costs incurred
last year.
Entertainment Publishing
2 entertain, our joint venture with BBC Worldwide, has continued to enjoy strong sales ahead of internal forecasts. During the half-year
a total of 122 DVD titles and 168 audio CD titles were launched. International territories continue to be an important growth area and it
was very pleasing for the business to receive the Queen's Award for Enterprise 2008 in recognition of its international sales development,
particularly through the success of 'Planet Earth'. During the first half, total sales were 13.2 per cent ahead of the previous year, with
'Planet Earth' continuing to be the top seller in North America, whilst in the UK a number of strong DVD titles were released including
'Cranford', 'The Mighty Boosh', 'Gavin & Stacey' and the 'Manchester United - Season Review 2007/8'. Operating profits were broadly flat in
the first half, reflecting the timing and significance of key releases, but with a strong release schedule for the second half, the business
is expected to deliver full year results ahead of internal targets.
During the period the Board undertook a detailed review of the options for the Group's investment in 2 entertain. After careful
consideration we concluded that in the current market environment it was not appropriate to crystallise value at this time and the business
therefore remains a valuable part of the Group and an important driver of profitability and cashflow.
Retail
The operational issues and strategic challenges faced by Woolworths Retail were highlighted in its poor trading performance in the first
half. There have been underlying problems in the business for a number of years. The Board believes that these problems can be addressed,
but a full and permanent resolution will take some time to achieve. The business has significant strengths on which to build; high customer
footfall across an extensive store portfolio in good locations. It has commercial scale in its core markets and a brand that still has great
resonance with customers across generations and demographics. However, previous initiatives have been insufficient to offer the size of
profit breakthrough required to place it on a sustainable footing and this has been exacerbated by a weakening retail environment and
increasing cost inflation.
Under Steve Johnson, the new Chief Executive, we are already taking action to address the immediate issues facing Woolworths Retail,
while working on a fully developed longer term strategy. The work to tackle the operational, strategic and cultural issues that are driving
many of the problems is already well advanced. In the meantime, management has started to reinstate basic operational standards of value,
availability and service, alongside a ruthless drive for business simplification. Small and medium sized stores - key to the sustainable
profitability of the business - will be placed at the heart of the organisation, whilst opportunities to trade or reposition the larger
stores in our portfolio will be reviewed.
Operationally, our imperative is to return to the retailing basics of our business. Product availability needs urgently to be improved,
initially through focusing on our top selling lines, with appropriate product and price repositioning to ensure that customers can see a
clear value proposition. Cost efficiency is another key driver of improving our business performance through the reorganisation of our cost
base, particularly in the supply chain and at head office.
In the longer term, and in order to drive consistent growth, we need to rebuild authority in our core categories - toys, clothing and
entertainment. Woolworths Retail has a core set of small and medium sized stores which, in spite of historical underperformance on price
perception and availability, achieve relatively high levels of profitability. These stores also achieve positive store contribution in most
months of the year. The overall performance of the business has been significantly affected by the larger high street and out of town stores
where, in many cases, sales volumes do not support the associated high rents and fixed costs. Furthermore, range planning for the overall
retail estate has been disproportionately influenced by these larger stores. These problems can only be properly addressed in the
medium-term but, alongside the simplification programme for the supply chain, all viable opportunities to redevelop these larger sites into
smaller sub-let units, or to secure further in-store concessions, will continue to be actively considered.
The business has already started a stock clearance exercise that will obviously impact on margin in the second half, but more
importantly maximise the cash return to the business. More effective stock controls are being introduced which, combined with improved
availability from the operational improvements mentioned earlier, are expected to lead to sales uplifts.
A review was carried out during the period of the multichannel fulfilment capability and the decision made to outsource this part of the
operation; accordingly the multichannel distribution centres were closed in the period.
3. BORROWING AND CAPITAL EXPENDITURE
Capital expenditure in the first half of the year has been tightly controlled. In Woolworths Retail there was no major refit activity
although investment has been made in improvements to stock management systems and four small stores have been opened. Total Woolworths
Retail capital expenditure amounted to £11 million (£18 million in the first half of 2007/8). Net debt at the half-year was £295 million up
from £218 million last half-year end, driven by increased working capital requirements in the Entertainment Wholesale business.
In January 2008 the Group entered into £385 million of new 4 year borrowing facilities which together with the separate facilities
available to the Bertram Group provide up to £416 million of committed facilities. These facilities flex with the Group's working capital
requirements. The Group is in compliance with requirements of these facilities and expects to remain so.
Interest costs in the first half increased substantially to £18.6 million from £8.8 million. This reflects an increase in average net
debt from £243 million to £286 million driven by increased working capital requirements of the Entertainment Wholesale business and the
payment of the up-front costs of the new financing arrangements. In addition the costs of the new facilities are higher when compared to the
expiring facilities which were much less flexible and were entered into in a much more benign credit environment.
4. DIVIDEND
The Board has decided not to pay an interim dividend. It believes it is better to invest the money saved in turning Woolworths Retail
around. Dividend payments will be resumed once a sustainable improvement in the profitability of the Group as a whole has been
demonstrated.
5. EXCEPTIONAL ITEMS
Exceptional costs incurred in the period comprise: (i) costs of restructuring within Woolworths Retail, including the closure of the
in-house multichannel distribution centres and head office redundancies associated with business simplification initiatives announced in
March (ii) an increased provision for former Big W out of town stores (iii) the final costs of closing the former THE site and (iv) the fine
from the Financial Services Authority in relation to the delay in announcing changes to the contract between EUK and Tesco in 2005.
6. PENSION SCHEME
At 2 August 2008 the pension fund deficit calculated under IAS19 had increased to £58.2 million net of deferred tax (£48.2 million at 2
February 2008). The triennial valuation at 31 March 2008 is currently underway and once this is available a revised schedule of
contributions will be negotiated with the Trustees commencing in February 2009.
7. PRINCIPAL RISKS
The principal risks and uncertainties facing the Group for the remaining six months of the year are as follows:
i Competition
The Group operates in highly competitive markets. In particular, in recent years the retail landscape has seen significant changes in
retailing trends and in consumer behaviour and spending which are challenging for all UK retailers including Woolworths Retail. The Group
has faced and expects to face increased competition from existing UK general and specialist retailers, food retailers that have expanded and
are further expanding into general merchandising, foreign retailers entering the UK market and newly formed competitors.
ii Growth of the Digital Entertainment Market
A key driver of footfall and sales within the Woolworths Retail business and the core stock-in-trade for EUK, Bertrams and 2 entertain
is physical entertainment media; CDs, DVDs, Books and Games.
In recent years, technological advances and changing consumer preferences have given rise to new markets providing delivery of music,
films, games and books to portable players and to the home via digital delivery, bypassing the purchase of traditional physical media
platforms. This trend may result in decreased demand for such products in stores.
iii Trading
Whilst the Group is currently experiencing positive like-for-like sales in its retail business, given the well documented pressures on
the retail sector, and in particular the importance of the Christmas trading season to the Group, this must be an area of uncertainty.
In addition to this the Group, along with the rest of the sector is experiencing pressure on working capital. This pressure is driven by
credit insurers taking a more adverse view of providing cover for suppliers to non-food retailers and distributors. However the Group
continues to review ways to phase inventory purchases and adjust payment terms to manage through its peak working capital period without
impacting customer service levels and has a plan of action to remain within its current borrowing facilities.
iv General UK Economic Conditions and Retail Environment
Both of the Group's trading segments are highly exposed to general UK economic conditions and associated consumer spending habits. As
has been widely publicised, consumer spending has been significantly lower in 2008 in comparison with 2007, resulting from higher energy and
food prices and increased housing costs. A sustained period of high inflation coupled with a poor economic outlook is likely to have a
negative impact on the Group's sales and margins.
v Damage to Reputation or Brands
The Woolworths name is a key asset of the business and maintaining the reputation of the brand is key to the success of the Group. The
many lines of merchandise handled by the Group are subject to increasingly stringent laws and regulations, relating to health and safety,
packaging and labelling, pollution and other environmental factors.
Comprehensive quality assurance, legal and regulatory control processes are in place to mitigate such risks. However, such processes
cannot guarantee compliance or fully protect against quality, regulatory, safety and environmental risk in the supply chain. Any issues
which erode the reputation or value of the Woolworths name could have an adverse effect on the Group's financial condition.
Further details of the Group's risk profile and its approach to risk management can be found in the 2008 Annual Report.
8. OUTLOOK
The strength of our entertainment businesses provides a solid platform of profitability from which the turnaround of Woolworths Retail
can be based. Both EUK and 2 entertain are expected to deliver strong financial performances in the current year, and further growth and
efficiency opportunities are already being targeted.
In Woolworths Retail the stock clearance actions referred to above have meant that like-for-like sales for the six weeks to 13 September
2008 were up by 0.4 per cent, translating into a like-for-like sales decline of 2.5 per cent for the 32 weeks to that date. Total Group
sales for the same year-to-date period were down 2.6 per cent.
Within the retail business there is an enormous amount of work to be done, and in the coming months there will undoubtedly be some
difficult decisions required to bring about the necessary changes. Overall, the Group continues to work to identify ways to maximise sales
and margins, working within the constraints of a difficult retail environment and its own funding resources. The Board will undertake the
necessary action to underpin the turnaround of the retail business and secure the future long term success of the Group's businesses rather
than focus on short term accounting profit. The Board is confident that the hard work and commitment of all of our staff to making it
succeed will enable us to quickly make progress.
Group Income Statement (Unaudited)
for the 26 weeks ending 2 August 2008 and 4 August 2007
26 weeks to 2 August 2008 26
weeks to 4 August 2007
Before exceptional Exceptional items Before
exceptional Exceptional items
items Note 2 items
Note 2
Total
Total
Note £m £m £m
£m £m £m
Revenue 1 1,107.0 - 1,107.0
1,141.2 - 1,141.2
Cost of goods sold (854.8) (8.8) (863.6)
(865.3) - (865.3)
Gross profit 252.2 (8.8) 243.4
275.9 - 275.9
Selling and marketing costs (278.1) (7.9) (286.0)
(274.6) (2.2) (276.8)
Administrative expenses (60.1) (3.2) (63.3)
(65.7) (5.4) (71.1)
Other operating income 24.4 0.4 24.8
8.5 8.5 17.0
Operating (loss)/profit 1,12 (61.6) (19.5) (81.1)
(55.9) 0.9 (55.0)
Finance cost (20.6) - (20.6)
(9.5) - (9.5)
Finance income 2.0 - 2.0
0.7 - 0.7
(Loss)/profit before income (80.2) (19.5) (99.7)
(64.7) 0.9 (63.8)
tax
Income tax 3 28.3 3.4 31.7
20.9 (1.3) 19.6
Loss for the period (51.9) (16.1) (68.0)
(43.8) (0.4) (44.2)
Attributable to:
Equity holders of the Company
(51.9) (16.1) (68.0)
(43.8) (0.4) (44.2)
Loss per share (pence)
Basic and diluted 4 (4.7)
(3.0)
Dividends
The Directors do not propose to pay a dividend for the interim period (2007: 0.43 pence per share amounting to £6.2 million). The final
dividend in respect of last year of
0.17 pence per share (2007: 1.34 pence per share) amounting to £2.5 million (2007: £19.4 million) was paid in the period (see note 5).
Group Statement of Recognised Income and Expense (Unaudited)
for the 26 weeks ending 2 August 2008 and 4 August 2007
26 weeks to 2 August 2008 26 weeks to 4 August
2007
Before exceptional Exceptional items Before exceptional Exceptional
items
items Note 2 items
Note 2
Total
Total
£m £m £m £m
£m £m
Loss for the period (51.9) (16.1) (68.0) (43.8)
(0.4) (44.2)
Actuarial (loss)/gain on defined benefit scheme net
of tax (9.3) - (9.3) 14.4
- 14.4
Deferred tax adjustment to 28% on defined benefit
scheme - - - (1.4)
- (1.4)
Cash flow hedges:
- fair value of (losses)/gains net of tax (1.1) - (1.1) 1.8
- 1.8
- transfer to stock net of tax (0.2) - (0.2) (2.2)
- (2.2)
Net (losses)/gains not recognised in income
statement (10.6) - (10.6) 12.6
- 12.6
Total losses recognised in the period
(62.5) (16.1) (78.6) (31.2)
(0.4) (31.6)
All recognised losses are attributable to the equity shareholders of the parent company.
Group Income Statement (Audited)
for the 52 weeks ending 2 February 2008
Before Exceptional items
exceptional Note 2
items
Total
Note £m £m
£m
Revenue 2,969.6 -
2,969.6
Cost of goods sold (2,245.5) -
(2,245.5)
Gross profit 724.1 -
724.1
Selling and marketing costs (583.0) (2.3)
(585.3)
Administrative expenses (124.7) (9.5)
(134.2)
Other operating income 20.2 8.6
28.8
Operating profit/(loss) 36.6 (3.2)
33.4
Finance cost (25.7) -
(25.7)
Finance income 4.0 -
4.0
Profit/(loss) before income 14.9 (3.2)
11.7
tax
Income tax 3 (4.1) (0.1)
(4.2)
Profit/(loss) for the year 10.8 (3.3)
7.5
Attributable to:
Equity holders of the Company 10.8 (3.3)
7.5
Earnings per share (pence)
Basic and diluted 4
0.5
Dividends
A dividend of 0.17 pence per share (£2.5 million) was proposed but remained unpaid at the year end. Dividends of 1.77 pence per share
(£25.7
million) were paid in the year (see note 5).
Group Statement of Recognised Income and Expense (Audited)
for the 52 weeks ending 2 February 2008
Before Exceptional
excepti items
onal Note 2
items £m Total
£m £m
Profit/(loss) for the year 10.8 (3.3) 7.5
Actuarial gain on defined benefit scheme net 12.3 - 12.3
of tax
Deferred tax adjustment to 28% on defined
benefit scheme (1.8) - (1.8)
Deferred tax on share-based payments (0.1) - (0.1)
Cash flow hedges:
- Fair value of losses net of tax (0.7) - (0.7)
- Transfer to stock net of tax 4.7 - 4.7
Net gains not recognised in
income statement 14.4 - 14.4
Total gains/(losses) recognised in
the year 25.2 (3.3) 21.9
All recognised gains are attributable to the equity shareholders of the parent company.
Group Balance Sheet
at 2 August 2008, 4 August 2007 and 2 February 2008
Unaudited Unaudited Audited
2 August 4 August 2 February
2008 2007 2008
Note £m £m £m
Assets
Non-current assets
Goodwill 60.9 60.8 60.9
Other intangible assets 76.8 83.0 79.1
Property, plant and equipment 10 290.1 305.2 298.4
Fixed asset investments 0.2 0.2 0.2
Deferred income tax assets 28.6 8.3 -
456.6 457.5 438.6
Current assets
Inventories 447.8 421.8 391.0
Trade and other receivables 287.9 236.7 444.5
Derivative financial instruments 1.4 - 2.8
Current asset investments 5.3 - 4.5
Cash and cash equivalents 48.0 23.4 39.2
790.4 681.9 882.0
Current liabilities
Borrowings 11 (304.2) (239.9) (126.8)
Derivative financial instruments (14.6) (26.1) (18.2)
Trade and other payables (452.7) (419.5) (633.1)
Current income tax liabilities (3.5) (2.8) (5.6)
Provisions for other liabilities and 14 (7.1) (12.1) (9.5)
charges
Deferred income tax liabilities - - (7.4)
(782.1) (700.4) (800.6)
Net current assets/(liabilities) 8.3 (18.5) 81.4
Non-current liabilities
Borrowings 11 (38.3) (1.5) (36.1)
Trade and other payables (79.6) (74.1) (78.2)
Retirement benefit obligations 8 (80.9) (63.6) (66.9)
Provisions for other liabilities and 14 (30.9) (31.8) (23.2)
charges
(229.7) (171.0) (204.4)
Net assets 235.2 268.0 315.6
Shareholders' equity
Ordinary shares 13 182.4 182.4 182.4
Share premium 9.7 9.7 9.7
Other reserves 24.7 19.1 26.0
Retained earnings 18.4 56.8 97.5
Total equity 235.2 268.0 315.6
Group Cash Flow Statement
for the 26 weeks ending 2 August 2008 and 4 August 2007 and the 52 weeks ending 2 February 2008
Unaudited Unaudited Audited
26 weeks 26 weeks 52
to to weeks
2 August 4 August to
2008 2007 2
Februar
y
2008
Note £m £m £m
Cash flows from operating activities
Cash (utilised in)/generated from (130.2) (80.4) 61.7
operations
Interest paid (17.3) (9.5) (25.1)
Interest received 2.1 0.7 3.4
Income tax (paid)/received (2.1) 6.4 0.1
Net cash (utilised in)/generated from
operating activities (147.5) (82.8) 40.1
Cash flows from investing activities
Purchase of intangible assets (5.5) (5.6) (10.3)
Purchase of property, plant and equipment (9.1) (14.3) (32.4)
Proceeds from sale of property, plant and - 7.6 11.8
equipment
Disposal costs on sale of property, plant - - (0.2)
and equipment
Purchase of short-term investments (0.8) - (4.5)
Net cash utilised in investing activities (15.4) (12.3) (35.6)
Cash flows from financing activities
Repayment of bank borrowings - - (116.1)
Proceeds from bank borrowings 1.2 86.9 33.9
Proceeds from collateralised borrowings 176.4 25.0 125.0
Debt issue costs paid (2.8) (0.2) (8.2)
Finance lease principal repayments (0.6) (0.9) (1.3)
Dividends paid to Company's shareholders 5 (2.5) (19.4) (25.7)
Net cash generated from financing 171.7 91.4 7.6
activities
Net increase/(decrease) in cash and cash
equivalents 8.8 (3.7) 12.1
Cash and cash equivalents at beginning of 39.2 27.1 27.1
the period
Cash and cash equivalents at end of the 7 48.0 23.4 39.2
period
Cash and cash equivalents consist of:
Cash 48.0 23.4 39.2
Cash and cash equivalents at end of the 7 48.0 23.4 39.2
period
Notes to the Interim Financial Information
General
Woolworths Group plc is a limited liability company incorporated, domiciled and registered in England and Wales. The address of its
registered office is 242 Marylebone Road, London, NW1 6JL.
The Company has its primary listing on the London Stock Exchange.
This condensed consolidated interim financial information was approved for issue on 17 September 2008.
These interim financial results do not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 2 February 2008 were approved by the Board of Directors on 2 April 2008 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under 237 of the Companies Act 1985.
This condensed consolidated interim financial information has been reviewed not audited.
· Basis of Preparation
This condensed interim financial information for the 26 weeks ended 2 August 2008 has been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union.
The interim condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 2
February 2008, which have been prepared in accordance with IFRSs as adopted by the European Union.
These interim financial results have been prepared on a going concern basis, which assumes the Group will continue to be able to meet
its liabilities, when they fall due, for the foreseeable future. The Directors have produced cash flow forecasts which indicate that the
Group can continue as a going concern. In preparing those forecasts, the Directors have taken into account the following material
uncertainties:
· The current general uncertainties in respect of the UK economic conditions and associated consumer spending habits.
· The importance of the Christmas trading season.
· The increased pressure on working capital, driven in part by credit insurers taking a more adverse view of providing cover to non-food
retailers and distributors, and the consequent renegotiations with suppliers of the terms in which they trade with us.
· The extent to which the phasing of inventory purchases can be adjusted or payment terms with our customers can be modified.
Having taken these uncertainties into account, the Directors believe it is appropriate to prepare the accounts on a going concern basis,
as they believe the Group can remain within its existing banking facilities. Accordingly, the interim financial information does not include
the adjustments that would result from failure to remain a going concern.
Accounting Policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 2 February 2008, as
described in those annual financial statements.
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year ending
31 January 2009 but have no material impact for the Group:
* IFRIC 11, 'IFRS 2 - Group and treasury share transactions'.
* IFRIC 12, 'Service concession arrangements'.
* IFRIC 14, 'IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction'.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year
ending 31 January 2009 and have not been early adopted:
* IFRS 8, 'Operating segments', effective for annual periods beginning on or after 1 January 2009. IFRS 8 replaces IAS 14 and aligns
segment reporting with the requirements of the US standard SFAS 131, 'Disclosures about segments of an enterprise and related information'.
The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal
reporting purposes. The Group will apply IFRS 8 from 1 February 2009. The expected impact is still being assessed by management.
* IFRS 2 (amendment) 'Share-based payment transactions', effective for annual periods beginning on or after 1 January 2009. The
Group will apply IFRS 2 (amended) from 1 February 2009. The expected impact is still being assessed by management.
* IAS 32 (amendment), 'Financial instruments: presentation', and consequential amendments to IAS 1, 'Presentation of financial
statements', effective for annual periods beginning on or after 1 January 2009. The Group will apply IAS 32 (amended) from 1 February 2009.
The expected impact is still being assessed by management.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year
ending 31 January 2009 and have no material impact for the Group:
* IAS 23 (amendment), 'Borrowing costs', effective for annual periods beginning on or after 1 January 2009. It requires an entity to
capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a
substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those
borrowing costs will be removed. The Group will apply IAS 23 (amended) from 1 February 2009, but it is currently not applicable to the Group
or company as there are no qualifying assets.
* IFRS 3 (amendment) 'Business combinations' and consequential amendments to IAS 27, 'Consolidated and separate financial
statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint ventures' effective prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. This is
applicable to the Group from 3 February 2010.
* IAS 1 (amendment), 'Presentation of financial statements', effective for annual periods beginning on or after 1 January 2009. The
Group will apply IAS 1 (amended) from 1 February 2009.
* IFRIC 13, 'Customer loyalty programmes', effective for annual periods beginning on or after 1 January 2009. This is not relevant
to the Group's operations.
1. Segmental Analysis
The Group considers that business segmental analysis is its primary reporting basis. The Group's business is divided into a Retail
segment and an Entertainment Wholesale and Publishing segment. Woolworths plc, WMS Jersey Limited, Tromax Limited and Flogistics Limited are
included within the Retail segment, with Entertainment UK Limited, Bertram Group Limited (Bertrams), Disc Distribution Limited and 2
entertain Limited being the constituents of Entertainment Wholesale and Publishing. No material trading is undertaken outside the UK and
consequently no geographic segmentation has been shown.
26 weeks to 2 August 2008 (Unaudited) 26 weeks to 4 August 2007 (Unaudited)
Entertainment Entertainment
Wholesale Wholesale
and and
Publishing Publishing Total
£m £m £m
Retail Unallocated Total Retail Unallocated
£m £m £m £m £m
Group
-Gross revenue 660.7 600.1 - 1,260.8 695.6 588.9 - 1,284.5
-Intersegment - (153.8) - (153.8) - (143.3) - (143.3)
Revenue 660.7 446.3 - 1,107.0 695.6 445.6 - 1,141.2
Operating loss before
exceptional items
Exceptional items
(55.1) (1.6) (4.9) (61.6) (49.4) (1.4) (5.1) (55.9)
(17.4) (1.7) (0.4) (19.5) 8.5 (7.6) - 0.9
Operating loss after
exceptional items (72.5) (3.3) (5.3) (81.1) (40.9) (9.0) (5.1) (55.0)
Finance cost (20.6) (9.5)
Finance income 2.0 0.7
Loss before income tax
Income tax (99.7) (63.8)
31.7 19.6
Loss for the period (68.0) (44.2)
Attributable to:
Equity shareholders
(68.0) (44.2)
Intersegment transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third
parties.
Unallocated costs represent corporate expenses. 2. Exceptional Items
Unaudited Unaudited Audited
26 weeks 26 weeks 52
to to weeks
2 August 4 August to
2008 2007 2
£m £m Februar
y
2008
£m
Restructuring costs (11.6) (4.2) (8.4)
Reorganisation of out of town stores (7.5) - -
Financial Services Authority fine (0.4) - -
Woolworths property income - 8.5 8.6
Capital contribution to 2 entertain arising on - (3.4) (3.4)
joint venture
Total exceptional items before income tax (19.5) 0.9 (3.2)
Income tax 3.4 (1.3) (0.1)
Exceptional items after income tax (16.1) (0.4) (3.3)
The current period restructuring costs relate to head-office redundancy costs associated with business simplification initiatives within
Woolworths plc, and costs associated with the closures of distribution centres at Stoke and Ollerton, as a result of changes to the
Multichannel Retail distribution network. The prior year costs relate to restructuring the Entertainment Wholesale business, following the
acquisitions of THE and Bertrams, and the subsequent referral of the Bertrams acquisition to the Competition Commission.
During the current period a review has been undertaken for the former Big W out of town stores. As a result further provision for asset
impairment and onerous leases have been made, in addition to the original provision made in the year ended 28 January 2006.
As previously disclosed, the fine from the Financial Services Authority relates to the delay in announcing changes to the contract
between EUK and Tesco in December 2005.
The exceptional Woolworths property income in the prior year relates to the sale and leaseback agreements for the properties in Jersey
and Guernsey.
During the prior period an additional provision of £3.4 million was made relating to the agreement on formation of 2 entertain Limited,
where the parties agreed to guarantee the value of their respective businesses transferred to 2 entertain Limited over a period of three
years to September 2007.
3. Income Tax
Unaudited Unaudited Audited
26 weeks 26 weeks 52
to to weeks
2 August 4 August to
2008 2007 2
£m £m Februar
y
2008
£m
Analysis of credit/(charge) in the period:
Current tax
- Before exceptional items - - (4.1)
- Exceptional items - - (0.1)
Deferred tax
- Before exceptional items 28.3 20.9 -
- Exceptional items 3.4 (1.3) -
Total income tax credit/(charge) 31.7 19.6 (4.2)
Income tax is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full
financial year. The estimated average annual tax rate used for this interim period is 32 per cent (at 4 August 2007: 31 per cent) after
exceptional items.
Included within the deferred tax asset of £28.6 million (at 4 August 2007: £8.3 million) is an amount of £31.7 million recognised on the
losses incurred in the year to date (at 4 August 2007: £19.6 million). Due to the seasonality of the business, the Directors believe this
will reverse by the year end.
4. Earnings per Share
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
2 August 4 August 2 February
2008 2007 2008
Number of shares (millions)
Weighted average number of ordinary shares in issue 1,451.4 1,450.3 1,451.1
Effect of dilutive securities - - -
Diluted weighted average number of shares 1,451.4 1,450.3 1,451.1
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
2 August 4 August 2 February
2008 2007 2008
Per share amount Per share amount Per share amount
(pence) (pence) (pence)
Earnings Earnings Earnings
£m £m £m
Basic EPS (68.0) (4.7) (44.2) (3.0) 7.5 0.5
Effect of dilutive securities - - - - - -
Diluted EPS (68.0) (4.7) (44.2) (3.0) 7.5 0.5
Adjusted earnings per share
Basic and diluted EPS (68.0) (4.7) (44.2) (3.0) 7.5 0.5
Fixed rental adjustment (net 1.0 0.1 2.7 0.2 5.6 0.4
of tax)
Amortisation of intangible
assets arising on 2.8 0.2 1.7 0.1 4.3 0.3
consolidation (net of tax)
Exceptional items (net of tax) 16.1 1.1 0.4 - 3.3 0.2
Adjusted basic and diluted EPS (48.1) (3.3) (39.4) (2.7) 20.7 1.4
including profit from
property transactions
Less profit from property (11.3) (0.8) (3.5) (0.2) (8.0) (0.6)
transactions (net of tax)
Adjusted basic and diluted EPS (59.4) (4.1) (42.9) (2.9) 12.7 0.8
Basic
Basic earnings per share is calculated by dividing the profit/loss attributable to equity shareholders of the Company by the weighted
average number of ordinary shares in issue during the year, excluding interests in own shares purchased by the Woolworths Group Employment
Ownership Plan (ESOP) to meet obligations under Employee Share Schemes which are accounted for as treasury shares.
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of
all dilutive potential ordinary shares. The Company has only one category of dilutive potential shares - share options. For the share
options, a calculation is undertaken to determine the number of shares that could have been acquired at fair value (determined as the
average market share price of the Company's shares over the period) based on the monetary value of the subscription rights attached to the
outstanding share options. The number of shares calculated is compared with the number of shares that would have been issued assuming the
exercise of the share options.
Adjusted
Adjusted earnings per share excludes the fixed rental uplift adjustment, the amortisation of certain intangible assets arising on
consolidation, namely underlying rights, customer relationships and trade names, the effect of exceptional items and the impact of profit
from property transactions.
5. Dividends
Unaudited26 weeks to2 August2008 Unaudited26 weeks to 4 August2007 Audited52 weeks to2 August2008
Pence pershare £m Pence pershare £m Pence pershare £m
Dividends proposed
Interim - - 0.43 6.2 0.43 6.2
Final - - - - 0.17 2.5
- - 0.43 6.2 0.60 8.7
Dividends paid
Interim - - - - 0.43 6.3
Final 0.17 2.5 1.34 19.4 1.34 19.4
0.17 2.5 1.34 19.4 1.77 25.7
The Directors do not propose to pay a dividend for the interim period.
6. Statement of Changes in Shareholders' Equity
Attributable to equity holders of the Company
Sharecapital£m Share premium£m Other reserves£m Shares held by
Retained earnings£m Total£m
Trust£m
At 2 February 2008 182.4 9.7 26.0 (2.7)
100.2 315.6
Loss for the period - - - -
(68.0) (68.0)
Dividends - - - -
(2.5) (2.5)
Cash flow hedges:
- fair value of losses net of tax - - (1.1) -
- (1.1)
- transfer to stock net of tax - - (0.2) -
- (0.2)
Actuarial loss on defined benefit scheme - - - -
(9.3) (9.3)
Share-based payments - - - -
0.7 0.7
At 2 August 2008 182.4 9.7 24.7 (2.7)
21.1 235.2
At 3 February 2007 182.4 9.7 22.0 (3.2)
106.7 317.6
Loss for the period - - - -
(44.2) (44.2)
Dividends - - - -
(19.4) (19.4)
Cash flow hedges:
- fair value of gains net of tax - - 1.8 -
- 1.8
- transfer to stock net of tax - - (2.2) -
- (2.2)
Actuarial gain on defined benefit scheme - - - -
14.4 14.4
Deferred tax adjustment to 28% on defined benefit scheme - - - -
(1.4) (1.4)
Share-based payments - - - -
0.8 0.8
Realisation of revaluation reserve - - (2.5) -
2.5 -
Net movement of shares held by Trust - - - 0.6
- 0.6
At 4 August 2007 182.4 9.7 19.1 (2.6)
59.4 268.0
7. Net Debt Reconciliation
Group net (debt)/funds comprise the following:
Audited 2 Cash flow Non cash items Unaudited2 August 2008
February2008
£m £m £m £m
Cash and cash equivalents 39.2 8.8 - 48.0
Finance leases (2.9) 0.6 (2.0) (4.3)
Bank borrowingsCollateralised (33.9)(126.1) (1.2)(176.4) (0.1)(0.5) (35.2)(303.0)
borrowing
Net debt at end of the period (123.7) (168.2) (2.6) (294.5)
8. Retirement Benefit Obligations
The amounts recognised in the balance sheet are determined as follows:
Unaudited2 August Unaudited 4 August 2007 £m Audited2 February 2008 £m
2008£m
Present value of funded (383.9) (386.0) (383.7)
obligations
Fair value of scheme assets 303.0 322.4 316.8
Present value of unfunded (80.9) (63.6) (66.9)
obligations (gross)
The amounts recognised in the income statement are as follows:
Unaudited26 weeks Unaudited 26 weeks to4 Audited52 weeks to2 February2008£m
to2 August 2008£m August2007£m
Current service cost 7.1 8.6 17.6
Expected return on scheme (10.6) (10.9) (22.9)
assets
Interest cost 12.4 10.8 22.3
Total included in staff costs 8.9 8.5 17.0
The key financial assumptions applied in the actuarial review of the Woolworths Group Pension Scheme have been reviewed in the
preparation of these interim accounts and amended where appropriate. The main financial assumption is the real discount rate, i.e. the
excess of the discount rate applied (6.8 per cent) over the inflation rate applied (3.6 per cent). If this assumption increased/decreased by
0.1 per cent, the pension obligation would decrease/increase by approximately £9.0 million (before tax) and the annual service cost would
decrease/increase by approximately £0.7 million.
9. Contingent Liabilities
At the half-year, no contingent liabilities exist.
10. Property, Plant and Equipment
Land and Fixtures, fittings and equipment£m Total£m
buildings£m
Cost
At 3 February 2008 20.7 701.3 722.0
Additions 0.1 10.1 10.2
Disposals - (6.5) (6.5)
At 2 August 2008 20.8 704.9 725.7
Depreciation
At 3 February 2008 (2.4) (421.2) (423.6)
Charge for period (0.1) (15.6) (15.7)
Impairment - (1.3) (1.3)
Disposals - 5.0 5.0
At 2 August 2008 (2.5) (433.1) (435.6)
Net book amount
At 2 August 2008 18.3 271.8 290.1
Land andbuildings£m Fixtures, fittings and Total£m
equipment£m
Cost
At 4 February 2007 19.1 693.4 712.5
Additions 5.1 8.6 13.7
Disposals (3.7) (6.5) (10.2)
At 4 August 2007 20.5 695.5 716.0
Depreciation
At 4 February 2007 (2.7) (398.1) (400.8)
Charge for period (0.1) (14.1) (14.2)
Disposals 0.5 3.7 4.2
At 4 August 2007 (2.3) (408.5) (410.8)
Net book amount
At 4 August 2007 18.2 287.0 305.2
11. Borrowings
Unaudited2 August2008£m Unaudited4 Audited 2 February2008 £m
August2007£m
Current
Bank loans and overdrafts due within one year or on
demand:
Unsecured:
Bank borrowings - 214.3 -
Secured:
Obligations under finance 1.2 0.6 0.7
leases
Collateralised borrowing 303.0 25.0 126.1
Total due within one year 304.2 239.9 126.8
Non-current
Secured:
Bank borrowings 35.2 - 33.9
Obligations under finance 3.1 1.5 2.2
leases
Total due after more than one 38.3 1.5 36.1
year
Total borrowings 342.5 241.4 162.9
Movement in borrowings is
analysed as follows:
Opening amount 162.9 131.7 131.7
Repayment of bank overdraft - (1.3) (1.3)
Repayment of bank borrowings - - (115.4)
Net proceeds from bank 1.3 111.9 33.9
borrowings
Net proceeds from 176.9 - 114.1
collateralised borrowings
Finance lease principal (0.6) (0.9) (0.1)
repayment
Financial lease additions 2.0 - -
Closing amount 342.5 241.4 162.9
12. Operating Loss
The following items of unusual nature have been credited to the operating loss during the period:
Unaudited26 weeks Unaudited26 weeks
to2 August 2008£m to4 August 2007£m
Reduced charge relating to - 8.8
re-life of property, plant and
equipment and intangible
assets
Property transactions* 17.8 7.3
* Represents profits on property transactions of £15.8 million (at 4 August 2007: £5.1 million) and a credit of £2.0 million (at 4
August 2007: £2.2 million) in relation to fixed rental uplifts under IFRS.
13. Ordinary Shares
Numberof Nominalvalue£m
sharesmillions
Authorised
Ordinary shares of 12.5 pence 1,600.0 200.0
each at 4 August 2007, 2
February 2008 and 2 August 2008
Called up and fully paid
At 4 August 2007, 2 February 1,459.0 182.4
2008 and 2 August 2008
14. Provisions
Guarantees
Entertainment arising on Onerous
Wholesale joint ventures property
Restructuring Out of town £m contract
£m restructuring s
£m Insurance £m Total
£m £m
26 weeks ended 2 August 2008
Opening net book amount at 3
February 2008 - 24.3 7.1 - 1.3 32.7
Charge to income statement - 6.6 2.7 - 0.3 9.6
Unwinding of discount - 0.2 - - - 0.2
Utilised during the year - (2.9) (1.4) - (0.2) (4.5)
Closing net book amount at 2
August 2008 - 28.2 8.4 - 1.4 38.0
26 weeks ended 4 August 2007
Opening net book amount at 4 February - 27.7 8.0 5.2 0.7 41.6
2007
Charge to income statement 1.0 - 1.8 3.4 0.4 6.6
Utilised during the year - (0.7) - (3.5) (0.1) (4.3)
Closing net book amount at 4 August 1.0 27.0 9.8 5.1 1.0 43.9
2007
Provisions have been analysed between current and non-current as follows:
Unaudited2 Unaudited4 August2007£m Audited2 February2008£m
August2008£m
Current 7.1 12.1 9.5
Non-current 30.9 31.8 23.2
38.0 43.9 32.7
15. Related Party Transactions
The following transactions were carried out with related parties:
26 weeks to2 26 weeks to4 52 weeks to2 February2008£m
August2008£m August2007£m
Purchase of goods and services
from joint venture
2 entertain Limited 12.0 13.0 51.8
12.0 13.0 51.8
Half-year balances payable to joint venture arising from
purchases of goods
2 entertain Limited 5.8 10.0 12.4
5.8 10.0 12.4
Dividend received from joint venture
2 entertain Limited 15.8 5.2 18.5
15.8 5.2 18.5
Statement of directors' responsibilities
The directors' confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 as
adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR
4.2.8, namely:
* an indication of important events that have occurred during the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
* material related-party transactions in the first six months and any material changes in the related-party transactions described
in the last annual report.
The directors of Woolworths Group plc, who held office during the period and up to the date of signing the financial statements were:
Richard North - Chairman
Trevor Bish-Jones - Chief Executive (resigned 15 August 2008)
Steve Johnson - Chief Executive (appointed 1 September 2008)
Stephen East - Finance Director
Steve Lewis - Executive Director
Tony Page - Executive Director
Peter Bamford - Non-Executive Director
Andrew Beeson - Non-Executive Director
Fru Hazlitt - Non-Executive Director
Roger Jones - Non-Executive Director
David Simons CBE - Non-Executive Director
By Order of the Board
Stephen East
Finance Director
17 September 2008
Interim Review Report to Woolworths Group plc
Introduction
We been engaged by Woolworths Group Plc to review the condensed set of financial statements in the interim financial report for the 26
weeks ended 2 August 2008, which comprises the Group Income Statement, Group Statement of Recognised Income and Expense, Group Balance
Sheet, Group Cash Flow Statement and the related notes. We have read the other information contained in the interim financial report and
considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for
preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority.
As disclosed within the Basis of Preparation note, the annual financial statements of the Group are prepared in accordance with IFRSs as
adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to Woolworths Group Plc a conclusion on the condensed set of financial statements in the interim
financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose
of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the
interim financial report for the 26 week period ended 2 August 2008 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
Emphasis of matter - Going concern
In arriving at our Review Conclusion, which is not qualified, we have considered the adequacy of the disclosures made in the Basis of
Preparation note within the Interim Financial Information concerning the company's ability to continue as a going concern. These disclosures
indicate the existence of material uncertainties which may cast significant doubt about the company's ability to continue as a going
concern.
PricewaterhouseCoopers LLP
Chartered Accountants
London
17 September 2008
Notes:
(a) The maintenance and integrity of the Woolworths Plc website is the responsibility of the Directors; the work carried out by the auditors
does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have
occurred to the financial statements since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
This news release contains forward looking statements based on current assumptions and forecasts made by Woolworths Group plc
management. Various known and unknown risks, uncertainties and other factors could lead to substantial differences between the actual future
results, financial situation, development or performance of the Group and the estimates given here. The Group accepts no obligation to
continue to report or update these forward-looking statements or adjust them to future events or developments. Further copies of this
announcement can be obtained from the office of the Group Finance Director on 020 7706 5502 or downloaded from the Group website
www.woolworthsgroupplc.com.
- ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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