WOW announced a 5.5 per cent rise in net profit from continuing operations to $1.2 billion for the first half of fiscal 2013.
Sales increased by 4.8 per cent to $30 billion.
Woolworths chief executive Grant O'Brien said the result reflected Woolworths' commitment to expanding its food and liquor business, maximising value from the business, and focusing on growth and the customer.
Woolworths provided full-year growth guidance of 6 per cent, up from the previous 3 per cent. Earnings per share were up 4.2 per cent to 101.1 cents a share.
Woolworths declared a half-year dividend of 62 cents a share fully franked, up 5.1 per cent on the same half last year. Cash flow from operating activities before interest and tax was up 25.2 per cent on the previous year.
Woolworths said at least 30 Masters stores will open by the end of the financial year. With the business targeting trade customers, sales have been impacted by dampened demand for building and construction materials.
The decision to spin off its property holdings into the Australian Securities Exchange-listed real estate investment trust, the SCA Property Group (SCP), has freed up capital on its balance sheet and allowed the business to focus on growth on its core retail businesses.
The company also said it finalised the sale of the Dick Smith Electronics business during the half, allowing the company to focus on parts of its business that will drive long-term growth. The sale of the Dick Smith business was also a positive as they have been underperforming.
Woolworths acknowledged that they will have to focus on ensuring their supermarkets are performing well given that Coles has really lifted its game over the last five years.
With WOW currently trading at $34.80 it has reached our price target, for long term holders taking a part profit would make sense.
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