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Coles Group Limited - Report FY19 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Coles Group Limited (ASX: COL) is a leading Australian retailer with over 2500 stores that service 21 million customers each week, COL operates supermarket, fuel, and liquor retailers as well as a financial services platform.


Source: Coles Careers

What are the FY19 results for COL?

  • Total revenue down 1.7% to $38.5b
  • Total revenue excluding fuel and hotel operations is up 3.1% to $35b
  • Net Profit After Tax (NPAT) increased 5.4% to $1, 078m.
  • 30% growth in online sales generating $1.1b in revenue.
  • Total dividend distribution for FY19 of 35.5 cents per share.

What are the drivers of this result?

Supermarket sales revenue grew by 3.2% to $30.9b for FY19 driven by increases in online sales, new stores entering the market and successful sales campaigns including the “Coles little shop” Coles flybys also continued to benefit COL as membership reached 6.6m households. The Company has also actively lowered prices with deflation excluding tobacco and fresh products at 1.2%. Despite this drought effects had an adverse impact on the price of fresh goods. Coles liquor also increased its revenue, rising by 1.9% to $3.1b as 27 new stores were established however Fuel sales fell by 35.7% to $3.0b. Coles has also invested $146m into modernising its supply chain, this investment will reduce future expenses considerably.

What is the future outlook for COL?

Coles is expecting sales growth in its fuel sector as volumes increase facilitating a reduction in prices however COL has set guidance that fuel revenue will remain lower than previous years. Coles is expecting its Smarter Selling initiatives to generate and additional $150m in revenue whilst its “little Shops 2” marketing strategy is projected to have continued success.

How has the market reacted?

The share price has responded positively rising 3.7% to a price of $13.73 with investors encouraged by COL’s final dividend distribution and increased supermarket revenue. The company announced a 2H dividend of 24cps and a special dividend of 11.5cps.




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