By IRENE CHAPPLE and AGENCIES
New Zealand supermarkets Countdown, Woolworths and Foodtown generated interim pretax earnings of A$73.3 million ($82.9 million) for their Australian owner, Foodland Associated, the company said yesterday.
The result for the six months to February 1 - which is before interest, tax and amortisation - was up 8.8 per cent on the same period last year. New Zealand sales were A$1.67 billion, up 2.8 per cent.
Since it bought Woolworths in 2002, Foodland has binned the Big Fresh and 3 Guys brands, and the 17 Price Chopper stores are now to be rebranded Countdown or Woolworths.
Foodland managing director Trevor Coates said the brands had been in decline.
He said the October sale of Farmers - bought by jewellery retailer James Pascoe and Fisher & Paykel Appliances for $311 million - was important strategically.
"FAL is now a company focused exclusively on its grocery retailing and wholesaling operations without the earnings volatility associated with department store retailing."
Coates said the New Zealand arm was benefiting in supply negotiations due to its combined size.
However, it had suffered from cost overruns in building its Auckland distribution centre.
Foodland, which is based in Perth but earns most of its income from New Zealand, produced a group net profit of A$77.8 million, up 30 per cent on the previous corresponding period.
The result includes a profit after tax of A$22.9 million from the sale of retail chain Farmers.
Foodland also announced that it had agreed to buy 16 Mobil petrol outlets in Western Australia. The deal remained conditional on finding a competitive fuel supply agreement.
In Australia, where Foodland ranks as a distant third player behind Woolworths and Coles Myer, sales were A$664 million, up from A$592 million in the previous corresponding period.
It declared a fully franked interim dividend payable on April 8 of 43Ac, up from 38.5Ac last year.
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