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Reuters
Published
Aug 26, 2010
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S.Africa's Woolworths profit rises, sees

By
Reuters
Published
Aug 26, 2010

Woolworths
Photo : Corbis
JOHANNESBURG, Aug 26 (Reuters) - South African retailer Woolworths (WHLJ.J) posted a 25 percent rise in full-year profit, helped by a recovering demand in Africa's biggest economy and said it expects a slow recovery ahead.

Woolworths, which sells upscale food and clothing, said on Thursday headline earnings per share rose to 157.2 cents in the year to end-June from 126 cents a year last year.

Headline EPS is the main profit gauge in South Africa and strips out certain one-off items.

Woolworths, which also operates in Australia, said it expects a slow improvement in both South Africa and Australia.

The Cape Town-based company said revenue for the year rose 8.2 percent to 23.7 billion rand ($3.22 billion).

Shares in Woolworths have gained more than 30 percent so far this year, outpacing a more than 2 percent decline in the Johannesburg's All-share index .JALSH.

Investors have been snapping up Woolworths and other South African retailers on hopes that decades-low interest rates, soccer World Cup and a tentative economic growth would ease strain on consumers.

But these benefits are tempered by high household debt levels and job losses.

South Africa's retail sales rose for a sixth consecutive month in June, helped by World Cup spending, but the increase was weaker than expected.

Woolworths' larger rival Shoprite (SHPJ.J), which this week posted a 16 percent rise in full-year profit, gave a cautious 2011 outlook, citing job losses and debt levels.

(Reporting by Tiisetso Motsoeneng; Editing by David Dolan)

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