The increase was attributed to a turnaround in the clothing division and the performance of its food division and David Jones in Australia.

In its results for the 26 weeks to 27 December 2015, Woolworths [JSE:WHL] group CEO Ian Moir said he is pleased with the turnaround produced by the clothing sector.

In a statement on Thursday, he said: “There has been a strong turnaround in the South African clothing business following corrective management action and the transformation of David Jones continues to deliver the results we expected.”

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Clothing and general merchandise experienced an improved half, with sales growing 12,5% in SA and clothing sales up 11,7%. Operating profit increased by 14,6%.

Its share price was up 0,85% at R93,29 at 08:50 on Thursday, sitting with a PE ratio of 25,02 and a market cap of R97,25 billion.

“Through our positioning as a leading Southern Hemisphere retailer, we are able to leverage our scale and global sourcing strategy to deliver quality products at competitive prices for our customers,” said Moir.

The food division sales increased by 12,1% and operating profit by 17,6%. “The supermarket strategy is proving successful and Christmas sales were strong,” the company said.

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David Jones had a strong first half performance, with improved merchandising and the expansion of the group’s private label brands across the chain, Woolworths said.

The directors declared an interim cash dividend of 133c per share, an increase of 37,8% on the same period last year.

Woolworths reiterated that economic conditions, particularly in SA are expected to become tougher amid interest rate hikes.

“Trading for the first six weeks in the second half of the financial year has however remained robust,” it said.

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Woolworths said return on equity went up by 24,6%, while adjusted profit before tax went up by 16,5% to R3,4 billion.

It expects its clothing and general merchandise price movement to increase by 8%-9% for the 2016 financial year, with food price movement up 6%-7%.

Source: News24 Wire