Woolworths Group has announced the completion of the sale of its petrol business to EG Group, with proceeds from the sale to be returned to shareholders via a $1.7 billion off-market buy-back.
The Buy-Back offer period will open on April 16 to eligible shareholders in Australia and New Zealand.
“We remain focused on maximising shareholder value and as foreshadowed at our half-year 2019 results, we will return the proceeds from the Woolworths Petrol sale to shareholders, Woolworths Group Chairman,” Gordon Cairns, said.
“A number of capital return options have been considered, and we believe that an off-market buy-back is the best option for the company and shareholders and will result in a significant franking credit release. The Buy-Back complements dividends of $1.4 billion already paid to shareholders this financial year through the F18 final and special dividends, and the F19 interim dividend. Following the Buy-Back, the Woolworths Group balance sheet will remain strong and allow sufficient flexibility for future growth.”
The sale is likely to result in a gain of approximately $1.1 billion after tax, to be recorded as a significant item in the F19 results.
30 Big W stores and two distribution centres to close
Following a BIG W network review, Woolworths plans to close 30 BIG W stores and two distribution centres over the next three years. The supermarket giant will take a $370 million hit related to the closures in its full-year results.
A warehouse in South Australia will close in the 2021 financial year, with one in Warwick, Queensland, to follow two years later, but the retailer didn’t specify which stores would close or how many jobs would go.
As foreshadowed at our half year 2019 results, while the recovery in trading for BIG W is encouraging and there remains further opportunity for improvement, the speed of conversion to earnings improvement is taking longer than planned. We understand the impact that the store and DC closures will have on our team and will endeavour to provide affected team members with alternative employment options within the Woolworths Group where possible,” Brad Banducci, Woolworths Group CEO said.
“This decision will lead to a more robust and sustainable store and DC network that better reflects the rapidly changing retail environment. It will accelerate our turnaround plan through a more profitable store network, simplifying current business processes, improving stock flow and lowering inventory,” he added.