{"id":841756,"date":"2025-11-05T15:00:00","date_gmt":"2025-11-05T13:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=841756"},"modified":"2025-11-05T14:12:55","modified_gmt":"2025-11-05T12:12:55","slug":"woolworths-owners-get-australian-company-for-free","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/841756\/woolworths-owners-get-australian-company-for-free\/","title":{"rendered":"Woolworths owners get Australian company for free"},"content":{"rendered":"\n

Anyone with Woolworths shares is currently getting the fashion, beauty, and home (FBH) and Australian businesses for free, as the stock\u2019s value is almost completely tied to the company\u2019s food business.\u00a0<\/p>\n\n\n\n

Speaking to Business Day TV<\/a>, PSG Wealth Portfolio Manager Graeme Franck said that many analysts believe that Woolworths stock buyers are only really paying for the food business.\u00a0<\/p>\n\n\n\n

Franck said that South Africans are basically getting the Australian business, the Country Road Group (CRG), and the FBH business in South Africa for free. <\/p>\n\n\n\n

On top of this, he added that there is value in the stock, which is trading at a relatively affordable price-to-earnings (P\/E)ratio of around 15. <\/p>\n\n\n\n

Franck noted that Woolworths\u2019 earnings are slightly suppressed, which could result in the P\/E ratio dropping even further. <\/p>\n\n\n\n

Shareholders are also receiving potential returns after Woolworths announced a share buyback in September 2025. <\/p>\n\n\n\n

Franck is not the only PSG Wealth employee who is positive on Woolworths, with PSG Wealth Equity Analyst Fisokuhle Mbutho <\/a>giving the stock a buy recommendation. <\/p>\n\n\n\n

Mbutho said that the strong food performance will offset challenges in FBH and the macroeconomic challenges facing CRG. <\/p>\n\n\n\n

While the stock is currently worth around R50, PSG Wealth has assigned an intrinsic value of R67 per share, representing an upside of approximately 30%. <\/p>\n\n\n\n

PSG Wealth expects the food business to remain stellar, as it will maintain margins and expand volumes while increasing prices. <\/p>\n\n\n\n

While the CRG businesses have faced extreme pressures, Mbotho said that the Australian company has substantial upside potential for a recovery in consumer spending, with easing inflation and decreasing interest rates. <\/p>\n\n\n\n

He added that the FBH turnaround will also continue, as full-priced sales are a significant portion of its revenue.\u00a0<\/p>\n\n\n\n

Although there are still risks facing CRG and FBH, PSG Wealth believes that the strength of the Food business will offset these risks.<\/p>\n\n\n\n

Latest results<\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

The latest financial results from Woolworths highlight what the experts are talking about, with food continuing to dominate. <\/p>\n\n\n\n

The group\u2019s food business saw above-market turnover and concession sales growth of 11.0%, with sector-leading growth of 7.7% on a comparable-store basis. <\/p>\n\n\n\n

The FBH business in South Africa saw turnover and sales increase by 4.7% and 5.1% on a comparable store basis, respectively. <\/p>\n\n\n\n

However, the adjusted EBITDA of R2,491 million marked a decline of 0.4% against the prior comparable period, while adjusted EBIT declined by 9.1% to R1,600 million.<\/p>\n\n\n\n

CRG also faced extreme challenges amid a restructuring effort to reconfigure its operating model and reset its structural economies as a standalone business. <\/p>\n\n\n\n

This restructuring also occurs during periods of high interest rates, low consumer foot traffic, and a challenging macroeconomic backdrop in Australia. <\/p>\n\n\n\n

CRG\u2019s sales declined by 5.4% and 6.8% on a comparable-store basis, with trading space dropping by 0.8% over the prior period as well. <\/p>\n\n\n\n

CRG saw aEBITDA decline by over 40% to A$103.9 million, while it also recorded an eEBIT loss of A$18.1 million. <\/p>\n\n\n\n

Overall, earnings per share dropped by 5.5% to 273.4 cents per share, while headline earnings per share fell by 26.4% to 268.1 cents. <\/p>\n\n\n\n

The group\u2019s total dividend also decreased from 265.5 cents per share in the previous year to 188 cents per share in the current year. <\/p>\n\n\n\n

Metric<\/strong><\/td>2025<\/strong><\/td>52\/52 on LY<\/strong><\/td>52\/53 on LY<\/strong><\/td><\/tr>
Turnover and concession sales<\/td>R81.0 billion<\/td>+6.1%<\/td>+4.2%<\/td><\/tr>
Turnover<\/td>R79.5 billion<\/td>+5.8%<\/td>+3.9%<\/td><\/tr>
Profit before tax<\/td>R3.0 billion<\/td>-14.4%<\/td>-17.8%<\/td><\/tr>
Adjusted profit before tax<\/td>R3.7 billion<\/td>-18.4%<\/td>-21.0%<\/td><\/tr>
Earnings per share<\/td>273.4cps<\/td>-1.4%<\/td>-5.5%<\/td><\/tr>
Headline earnings per share<\/td>268.1cps<\/td>-23.9%<\/td>-26.4%<\/td><\/tr>
Adjusted diluted headline earnings per share<\/td>303.4cps<\/td>-19.2%<\/td>-21.6%<\/td><\/tr>
Total dividend per share<\/td>188.0cps<\/td>265.5cps LY<\/td><\/td><\/tr><\/tbody><\/table><\/div>
Woolworths’ Financial Results<\/figcaption><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Those who would like to buy Woolworths shares are set to get “free” businesses on top of its food business. <\/p>\n","protected":false},"author":95,"featured_media":841757,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[20489,949],"class_list":["post-841756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-country-road","tag-woolworths"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=841756"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841756\/revisions"}],"predecessor-version":[{"id":841785,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841756\/revisions\/841785"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/841757"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=841756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=841756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=841756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}