Foodland Associated has reported a drop in net profit after spending $19.6 million on its takeover defence and subsequent demerger and schemes of arrangement.
Foodland Associated has reported a drop in net profit after spending $19.6 million on its takeover defence and subsequent demerger and schemes of arrangement.
Foodland Associated has reported a drop in net profit after spending $19.6 million on its takeover defence and subsequent demerger and schemes of arrangement.
The grocery wholesaler and retailer said its net profit after tax for the year to July 2005 was $95.3 million.
After excluding one-off items from the 2005 and 2004 results, it said profit rose 7.8 per cent to $113.7 million.
The 2005 profit will be the last set of results reported by Foodland, which is due to have its business split in two.
Metcash is planning to buy its wholesale business and most of its grocery stores, while Woolworths is planning to buy its New Zealand business and 22 Action stores and development sites.
The latter purchase is subject to a review by the Australian Competition and Consumer Commission, which said the purchase of eight of the stores (including six in WA) could substantially lessen competition in defined markets.
Foodland said its franchise and supply business in New Zealand produced an exceptional result, while its franchise and supply business in Australia and Progressive Supermarkets in New Zealand also produced better results.
The main negative was Action, which was adversely affected by the competitive trading environment, in particular the fuel discount schemes offered by Coles and Woolworths.
Foodland said the appeal of these schemes appeared to have increased in line with substantially higher petrol prices. Action’s underlying earnings fell by $3.7 million to $35.4 million.
On a group basis, earnings before interest, tax, amortisation and unusual items was $250.5 million, in line with the forecast released in its target’s statement prepared in response to the Metcash bid.
This outcome was helped by property profits of $5 million that were not budgeted for in the statement.
A scheme booklet with details of the demerger will be sent to shareholders pending court approval and the company will host meetings to seek shareholder approval for the changes.