Woolworths chairman Ralph Waters steps down despite $2.15bn profit

Woolworths will launch a new advertising campaign in the next few months after reporting a 12.5 per cent profit slump – its first full-year net profit drop in 19 years.

The appointment of former Lion Nathan chief Gordon Cairns as chairman is seen by analysts as a vital step in preparing the ground for the appointment of a new chief executive to replace the retiring Grant O’Brien.

Woolworths said the fall in profit was largely driven by a string of write-downs, with net profit before one-off costs coming in at $2.45 billion, roughly in line with past year.

“I’ve had my go”, he said.

Woolworths Ltd., Australia’s largest supermarket chain, appointed a new chairman and posted annual results that matched analyst estimates as its key sales measure fell for the first time since at least 2005.

Woolworths’ performance has slipped in the past year as its flagship supermarket business has been outgunned by biggest rival Coles.

“The most immediate issue is to identify new leadership to take the business forward”, Cairns said of the global search to find O’Brien’s successor.

Woolworths did not provide any detail on this process except to say that Mr Cairns would participate in the CEO search process.

By comparison, Coles recorded a 5.3 per cent rise in total sales and a 3.9 per cent increase in comparable sales for the same period.

“Masters is committed to bringing lower prices, more products and better competition in the home improvement and hardware market to the Sunshine Coast”, she said.

Those write-downs included: $148 million in general merchandise inventory relating to Big W; $199 million in “transformation costs” including professional services and food, liquor and petrol inventory write-downs; redundancy costs of $43 million; and property losses of $36 million.

“The market environment has changed dramatically with stronger competition and significant shifts in customers’ shopping behaviour”.

‘Woolworths is evolving and innovating to meet these challenges and finding new ways to delight our customers’.

The company, which is unrelated to South African department store Woolworths Holdings, maintained a final dividend of 72 cents per share.