WOOLWORTHS has powered through the global financial crisis to post its 11th straight year of profit growth.
The company will treat investors to a $700 million share buyback that will still leave it cashed up to bankroll its push into hardware.
Chief executive Michael Luscombe said Woolworths had secured nearly half the 150 sites for its planned big-box hardware chain and had finalised the product range within the network, which would soon go head to head with market leader Bunnings.
Mr Luscombe said that, with the first hardware store to open next calendar year and a good start to trading for its supermarkets and general merchandise divisions, Woolworths was on track to lift net profit by 8 to 11 per cent this financial year and maintain an unbroken earnings momentum that stretched back to 1999.
''Every year is a record profit, we specialise in record profits, and we have never gone backwards,'' he said.
''If you look back over the last 11 years, every year we have improved our profit on the previous year by double-digit percentage.''
The retailer yesterday posted a full-year profit of $2.02 billion, up 10.1 per cent, as revenue from its supermarkets, liquor outlets, hotels, electronics stores and apparel shops increased 4.2 per cent to $51.964 billion.
''There is a no doubt we need to take this result in what was a challenging trading period in the context of a reasonably good first half up until November, and then basically from … December all retailers felt some headwinds,'' Mr Luscombe said.
The buyback, in which Woolworths will return more than $1 billion to its owners in the 2010 calendar year, triggered a rally that pushed Woolworths shares nearly 8pc higher. The stock ended at a two-month high, up 64¢ at $27.54.
Earning before interest and tax (EBIT) was $3.08 billion, up 9.5pc from $2.82 billion in the previous period, and exceeding $3 billion for the first time.
Mr Luscombe said Woolworths was doing well in fresh food in the first few months of the new financial year, with a trend towards health-related products such as organic, gluten-free and free-range products.
''I have to say the early numbers for July and August, sales-wise, are pretty positive'' he said.
Woolworths' Australian and New Zealand supermarkets division posted EBIT growth of 13.6 per cent to $2.782 billion, although earnings contracted slightly compared with the previous year, which benefited from the federal government's stimulus package.
Its burgeoning three-year-old electronics business in India was EBIT positive for the first time, booking earnings of $1.3 million, but pre-tax earnings from its hotels operation fell 18.9 per cent to $176.7 million.
''Let's get this into context,'' Mr Luscombe said. ''Most hotels around the country didn't make much money last year … we are making money where a lot of others are going to the wall including a lot that are owned by our competitor that the banks want to foreclose on.''
He forecast the hotels division would increase earnings this financial year.
Constellation Capital equities analyst Daniel Nelson said the result was good overall, but he remained concerned about return on capital in the short-to-medium term as Woolworths made its push into the hardware market over the next year.
''They are looking for a growth option and they have tapped out their primary markets of supermarkets, food and liquor, so they needed another place to grow and hardware is a sector they could take on, I think they feel,'' he said.
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