Court ruling on back pay dents Woolworths profit
Woolworths’ first-half profits halved after a court ruling left the company owing workers nearly $710 million.
The supermarket giant on Wednesday announced a net profit of $374 million in the 27 weeks to January 4, down 49.4 per cent on the previous year. However, sales increased by 3.4 percent to $37.1 billion.
Woolworths said it had set aside $710 million for employee remediation following the Federal Court ruling on reward rights in September.
Excluding provisions, Woolworths’ net profit rose 16.4 per cent to $859 million. Earnings before interest, taxes, depreciation and amortization increased by 8.5 percent to $3.2 billion.
Chief executive Amanda Bardwell said Woolworths was making progress on its strategy and investing in value, on-demand convenience and in-store execution.
“All customer metrics have improved, trading momentum is stronger and we see market share stabilizing,” he said on Wednesday.
Sales at Woolworths supermarkets increased by 3.6 per cent, while Big W sales increased by 1.8 per cent.
Woolworths said it plans to develop its AI chatbot Olive into a “market-leading chat shopping companion” in the second half by partnering with Google.
The court ruling in September covered 27,000 Coles and Woolworths in-store managers receiving annual salaries with “set-off provisions” to cover reward entitlements such as overtime and penalty rates.
The court said that such provisions only apply to a single pay period and that higher pay in one pay period cannot be used to make up for the shortfall in another; This decision had significant consequences for Australian employers.
Woolworths has allocated $406 million to team leaders for potential remediation, plus a further $304 million for interest, superannuation and payroll taxes.
Woolworths will pay an interim dividend of 45 cents per share, up 15.4 per cent on the previous year.
Woolworths shares rose 7.9 per cent to $34.02 in early trading on Wednesday.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
