The Woolworths Group Ltd (ASX: WOW) share price is pushing higher today after reporting solid sales, profit, and dividend growth in FY 2021.…
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In afternoon trade, the retail conglomerate’s shares are up 1% to $41.20.
What happened in FY 2021?
For the 12 months ended 30 June, Woolworths reported a 5.7% increase in sales to $67,278 million. This was driven largely by its key Australian Food business and supported by strong performances by the Big W business and the now demerged Endeavour Group Ltd (ASX: EDV) business.
Thanks to an expansion in its margins, Woolworths’ earnings before interest and tax (EBIT) grew 13.7% to $3,663 million and its net profit after tax increased 22.9% to $1,972 million.
Woolworths dividend increased
Much to the delight of shareholders, this allowed the board to increase the final Woolworths dividend to 55 cents per share. This represents an increase of 14.6% over the prior corresponding period.
This brought the full year Woolworths dividend to a fully franked 108 cents per share, which is an increase of 15% year on year.
Based on the current Woolworths share price, this equates to a fully franked 2.6% dividend yield.
While the Woolworths dividend isn’t the largest that you’ll find on the Australian share market, it still smashes term deposits and savings accounts.
What else was announced?
Also giving its shares a boost today was news that its capital returns won’t stop at the Woolworths dividend.
This morning the retail giant announced plans to return funds to shareholders via a $2 billion off-market share buyback program.
Woolworths Group Chairman, Gordon Cairns, commented: “We have announced a $2 billion off-market share buy-back and declared a second half dividend of 55 cents per share, bringing our full year dividend to 108 cents per share, a 14.9% increase on F20. Endeavour Group is also expected to pay a dividend relating to H2 as previously communicated in the demerger booklet. Taken together, the growth in total dividends for the year is expected to be broadly in line with the growth in Group NPAT before significant items. Woolworths Group’s buy-back and final dividend will return approximately $1.1 billion of franking credits to shareholders.”
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Returns As of 16th August 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.