Net profit for the six months to Dec. 31 fell to $966.9 million from $1.16 billion the previous year.
Last month, Woolworths said it would close underperforming Dick Smith stores, sell the business and take a $300 million provision in the half.
Woolworths also plans to create 10,000 jobs in fiscal 2012 to grow its store numbers, including its Master Home Improvement outlets, a joint venture with US giant Lowe's, as it seeks to challenge the dominance of Wesfarmers' Bunning’s chain.
Woolworths said it anticipates before-tax start-up costs of up to $100 million for Masters in the full year, depending on the pace of its store rollout.
The company said it expects trading to remain subdued over the remainder of the year, and continues to estimate full-year after-tax profit growth of 2-6%, excluding restructuring costs.
Revenue for the period rose 5.0% to $29.91 billion from the previous year's $28.48 billion. The company also said it will pay an interim dividend of 59 cents a share, up from last year's 57 cents.
Woolworths is a defensive stock providing exposure to the retail sector.
With a full year guidance of Net Profit After Tax growth of 2-6%, excluding the $300 million provision on Dick Smith the company is expect to continue to grow.
Moving in to the home improvements market will ensure that they keep pace with competitors.
I continue to hold the stock at current levels and continue to accumulate at or below $25.
For more information on Woolworths (WOW) please contact us on 07 4771 4577.
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