Woolworths chairman, Ralph Waters, will step down after the supermarket giant suffered a 12.5 per cent slide in its full year profit.
Woolworths made a net profit of $2.15 billion for the year to June 30, down from $2.45 billion in 2013/14.
Waters will leave the company on September 1, to be replaced by veteran company director and businessman Gordon Cairns.
His departure follows the announcement that chief executive Grant O’Brien would step down once a successor is found.
The slide in full year profit comes as the company’s supermarket sector faces tough competition from arch rival Coles and German retailer Aldi.
Woolworths’ core food and liquor business lifted total sales 2.3 per cent for the year, while comparable sales were up just 0.7 per cent.
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.
Woolworths spent more than $200 million on improving its supermarkets during the second half of the year, including lowering prices and improving the quality of its products.
“The market environment has changed dramatically with stronger competition and significant shifts in customers shopping behaviour,” O’Brien said.
“Woolworths is evolving and innovating to meet these challenges and finding new ways to delight our customers.”
The extra investment in the supermarket business contributed to the slide in net profit, which was also weighed down by other one-off costs, including $148 million linked to its efforts to turn around Big W and $43 million in redundancy costs.
Excluding the one-offs and additional costs, the company’s profit was flat compared to a year ago.
Woolworths maintained its fully-franked final dividend of 72 cents per share.
New Chairman
Gordon Cairns has extensive retail and FMCG experience as the former CEO of Lion Nathan Ltd as well as having held senior marketing, operations and finance roles at PepsiCo, Cadbury and Nestle.
Currently he is the chairman of Origin Energy and Quick Service Restaurant Group. He was previously the chairman of David Jones and Rebel Group, and the director of Westpac.
“Woolworths is a great Australian business and it is an honour to be appointed to serves as its chairman,” Cairns said.
“The most immediate issue is to identify new leadership to take the business forward. The CEO search process has been underway since June and is progressing well.”
AAP
