The nation's largest retailer, Woolworths Ltd, has booked a 28.1 per cent increase in first half profit and says it is well positioned for growth.
Woolworths on Tuesday confirmed that it expects net profit for fiscal 2008 to grow by 19 per cent to 23 per cent.
The company also announced that it would partner investment bank HSBC to launch a branded credit card late in calendar 2008.
Woolworths also said it was committed to undertaking a capital management initiative in calendar 2008. In the past it has returned capital to shareholders through buybacks and dividends.
Woolworths booked a $891.3 million net profit in the 27 weeks ended to December 30, compared to $695.6 million in the prior corresponding period.
"This is clearly a strong result and one that reflects the momentum for sustained profitable growth that exists in our business," chief executive Michael Luscombe said.
Woolworths shares jumped 3.62 per cent, or $1.05, to $30.06 by 1101 AEDT.
Woolworths said it expects overall group sales to grow eight to 10 per cent, with earnings before interest and tax (EBIT) growing even faster than sales in the full year.
In the fiscal 2008 first half, Woolworths increased sales by 8.6 per cent to $24 billion, while EBIT rose 20 per cent to $1.37 billion.
"Each of our businesses is performing well," Mr Luscombe said.
"We continue to refine and improve all our brands to keep up with customer expectations and to seek new opportunities to add even more value to their shopping experience."
Woolworths chairman James Strong said the foundations for the company's future growth are well established.
"Woolworths is very well positioned and continues to re-invest in each of the businesses," he said.
"The second half of this financial year will see significant investment in several key strategic initiatives that will continue to enhance our offering to our customers."
Woolworths plans to launch its `Everyday Rewards' program nationally, following a successful trial, and replace paper petrol dockets with a card-based system.
It is speeding up the refurbishment of its supermarkets and Big W general merchandise stores and plans to have around 200 stores conforming to a new format by the end of fiscal 2008, at a capital cost of $1.8 billion.
It will offer a new branded credit card to its customers, building on its financial services platform.
"We are on track to launch our own credit card early in the new financial year," Mr Luscombe said.
"We are confident that these initiatives will all contribute to driving future growth."
In the first half, Woolworths' growth engine food and liquor increased EBIT by 19.3 per cent to $998.7 million, driving an 18.6 per cent rise in its Australia supermarkets EBIT to $1.04 billion.
The New Zealand supermarkets operation generated EBIT of $86.6 million, up 25 per cent.
There was further improvement in the BIG W business, where EBIT grew 20.1 per cent to $129.2 million.
"BIG W has delivered an excellent first half result reporting double digit growth in both revenue and earnings," Mr Luscombe said.
The consumer electronics division, covering Australia, New Zealand and India, reported EBIT growth of 5.7 per cent to $40.8 million.
Mr Luscombe said there was room for improvement.
"We have recommenced a review of the positioning and ranging within the business with a number of new format trial stores operating in the market," he said.
"There will be significant changes in Dick Smith stores in the months ahead."
In India, where Woolworths has a joint venture with Tata, there are now 13 stores under the Croma brand with 16 to open by the end of March.
"The stores are really modern and stand out in the marketplace," he said.
Woolworths said its cash flow and balance sheet remained strong.
Woolworths declared an interim dividend of 44 cents, up from 35 cents in the fiscal 2007 first half.
