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Cape Town - Retail giant Woolworths said on Thurday that it expected its profits for the year ended June to be higher than the profits recorded in the corresponding period, owing to profits after its subsidiary, David Jones, sold off one of its non-core assets in the period. 

“Shareholders are advised that earnings per share (EPS) for the 52-week period ended June 25, 2017 is expected to be substantially higher than the EPS for the 52-week period ended June 26, 2016, due to the profit on disposal by David Jones of its Market Street property in Sydney, Australia, as well as the benefit of a lower effective tax rate,” the company said in a statement. Woolworths bought David Jones in 2014, paying $2.2 billion (R29.42bn) for the company.

David Jones last year disposed of its Market Street Sydney store for $360 million to Scentre Group. David Jones will continue to occupy the site until late 2019 under a lease agreement. The group said that sales in the period increased by a modest 3 percent compared with the previous year, as growth in the second half of the year was adversely affected by the increasingly difficult trading condition. 

The group’s South African clothing and general merchandise sales increased by a marginal 1.4percent in the period under review, while its retail space grew by a net 2.2percent. The company said that the subdued growth in the second half of the year was as a result of significant political and economic upheaval. The company’s home market’s food business increased by 8.6percent in the period, but its growth in the second half of the year was impacted by lower inflation. 

The group’s Country Road Group sales increased by 5.1 percent in Australian dollar terms. The company said that the inclusion of newly-acquired Politix had added 3.7 percent to Country Road sales and the company also said that the financial services debtors’ book reflected year-on-year growth of 3.3 percent, with an impairment rate for the year at 6.3 percent, which is up from the 5.7 percent that has been recorded in the comparative period.