Coles shares rise on dividend lift, solid result
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More news: Shares in Coles Group are up nearly 5% to $20.57 after the supermarket giant declared its highest dividend in five years and reported half-year results largely in line with expectations. The company declared a 37 cent-per-share dividend, despite a 2.2% drop in first-half net profit to $576 million.
E&P Capital retail analyst Phillip Kimber said the result was above consensus and expects upgrades to consensus profit estimates.
"Overall, Coles delivered a better-than-expected result. Whilst sales momentum for Supermarkets has slowed, it remains solid considering the base being cycled. Whilst there was a number of items aiding 1H25, that will unwind / not repeat in 2H, the profit result was still strong and better than expected," he said in a note.
Coles posts HY profit drop but lifts dividend, chair James Graham to retire
The news: Supermarket giant Coles said it will increase dividend payments for investors, despite a 2.2% drop in first-half net profit to $576 million, after improving its supermarkets earnings and eCommerce sales during the period.
Coles also announced that its chairman James Graham will retire from the board on 30 April, with former Scentre Group chief executive Peter Allen set to replace him.
The numbers: The company declared a 37 cent-per-share dividend, above the average expectations from analysts polled by Visible Alpha. After tax profit was expected to fall 3% to $574 million.
Group sales rose 3.7% year on year to $23 billion, boosted by a 4.3% increase in supermarkets sales revenue.
Rival Woolworths on Wednesday unveiled cuts to dividend payments after half-year operating earnings fell 14%, a steeper drop than expected. The company said cost-of-living pressures were eroding brand loyalty among budget-conscious shoppers.
The context: Coles said that its value campaigns and strong trade across seasonal events such as Christmas and Halloween helped bolster supermarkets revenue.
Meanwhile, the group announced that Graham will step down as chairman, having been appointed in 2018 at the time of its listing on the ASX.
He will be replaced by Allen, who has been an independent non-executive director of Coles since September last year. Allen was managing director and chief executive of mall owner Scentre Group between 2014 and 2022, having previously served a chief financial officer of Westfield Group.
