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Investing.com-- Shares of Coles Group (OTC:CLEGF) rallied to a record high on Thursday after the Australian grocer reported a first-half profit in line with expectations and declared its highest dividend in at least five years.
Coles Group Ltd (ASX:COL) jumped 4.6% to a record high of A$20.68, outpacing a 0.3% rise in the ASX 200.
The company clocked a net profit of A$576 million ($363.3 million) for the six months to December 31, down 4% from the prior year but largely in line with market expectations. Underlying profit- which excludes one-off items- rose to A$666 million from A$626 million a year ago.
Cash earnings from the supermarket segment- Coles’ biggest revenue earner- surged over 14% to A$2.03 billion, amid increased consumer demand during the holiday season.
Coles was seen heavily capitalizing on warehouse strikes at larger rival Woolworths Ltd (ASX:WOW), with the former boosting its supply chain and hiring more personnel. Disruptions at Woolworths landed Coles more sales through the six-month period.
The company declared an interim dividend of A$0.37- its highest since fiscal 2019, and also up slightly from last year.
Coles has managed to largely weather increased pressure on consumer spending over the past two years, as Australia grapples with high interest rates and sticky inflation. But this has also served to boost the company’s overall margins and sales.
Australian inflation was seen coming down in recent months, which gave the Reserve Bank enough confidence to cut interest rates earlier in February.