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    Woolworths shares surge to record territory

    After posting an 11.4% increase in 26-week sales, shares in upmarket retailer Woolworths Holdings (WHL) advanced over 3% to R42.95, hitting an all-time high on Tuesday, 17 January.
    Woolworths shares surge to record territory

    This was mainly on the back of a strong performance in its food division, which grew by 11.7% with price movement of 4.8%. Sales in comparable stores (stores open for at least a year) grew by 8.4%, up from 7.2% at 20 weeks, it said.

    The company is the latest in a slew of retail bigwigs to release upbeat figures for the last few months.

    Mr Price (MPC) recorded sales growth of 15.9% for the third quarter, while Massmart Holdings (MSM) reported that total sales for the 26 weeks to December had increased to R31.6 billion, representing growth of 15.2%.

    The December period in particular has proven a boon for retailers.

    Earlier this week Shoprite Holdings (SHP), supported by a healthy growth in the demand for general merchandise, said sales for December were 15.5% higher than in the corresponding period.

    This supports claims by Spark ATM Systems whose statistics revealed the highest ever December average ATM withdrawal values recorded across the country.

    "The December 2011 results of the Spark Cash Index (SCI) indicates that we can expect the retail trade sales results for December 2011 to reflect a positive increase over the same period in 2010... indicating strong consumer spending and trading conditions for retailers and other businesses during the festive season," Marc Sternberg, MD of Spark ATM Systems said.

    Woolworths local clothing sales grew by 11.2% with a price movement of 7%. Sales in comparable stores grew by 5.9%, up from 4.9% at 20 weeks.

    Meanwhile, general merchandise grew by 6.2% and by 4.2% in comparable stores, up from 2.5% at 20 weeks.

    "The Woolworths Financial Services debtors' book reflected year-on-year growth of 6.7% at the end of December 2011.

    "The impairment rate for the six months to December 2011 was 1.7% compared with 1.6% for the equivalent period last year," the Cape Town-based company noted.

    Woolworths said it expected that both earnings per share (EPS) and headline earnings per share (HEPS) for the 26 week period to December 25, 2011 would be between 30% and 35% higher than the corresponding reporting period.

    Included in both EPS and HEPS is a R41 million post-tax unrealised gain from the mark-to-market of foreign exchange contracts open at December 25.

    The group's interim results for the 26 week period are scheduled to be announced on or about 16 February.

    Source: I-Net Bridge

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