Coles profits up for FY20, despite pandemic, bushfires

Coles has recorded a rare positive gain throughout the pandemic, with panic buying helping to boost profits, despite the bushfires and deadly virus.

While business distress is at a historic high, the supermarket retailer has recorded a profit in its 2020 final year results.

Full year sales revenue rose by 6.9% to $37.4 billion across all segments, increasing by 7.1% in the fourth quarter (Q4), which included the peak of panic buying. And the retailer recorded group EBIT growth for the first time in four years, up by 4.7%.

Convenience stores too proved an important channel, up 8.3% in Q4 and liquor sales surged 20.2% for the quarter. Coles delivered a total shareholder return of 31.7% for the financial year and will pay a final dividend of 27.5 cents per share.

Other highlights noted by the retailer include introducing more than 1,600 SKUs, bringing 1,500 new products under its everyday low prices campaign and notching $10 billion in Own Brand sales — a growth of 10% which comprised 31.2% of supermarket sales for Q4. As well as close to doubling their online capacity.

Coles Group CEO Steven Cain said the stellar results followed its refreshed strategy outlines in June last year and despite “the greatest test of our lifetime” managed to perform strongly.

“We are determined to emerge as a better, stronger business and team. Our purpose of sustainably feeding all Australians to help them lead healthier, happier lives is now more relevant than ever. The pace of change in the business is accelerating, particularly with our digital assets and capabilities, and we are demonstrating true agility on a week-to-week basis,” he said.

“For our many shareholders, we have successfully executed the first year of our strategic plan, restored group profit growth for the first time in four years, and are on track to grow long-term shareholder value. The interim and final dividend payments totalling $767 million importantly benefit millions of Australians.”

The results are in contrast to those of last year, when the retailer recorded a decline in profits of 9.1% to $1.43 billion.

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