Woolworths Group reported a net profit loss of 16.8 per cent in its half-yearly results thanks to a one-off restructuring charge to its Dick Smith brand.
The retail giant allocated $300 million as a restructuring provision to its consumer electronics chain.
As a result, net profit after tax (NPAT) dropped to $966.9 million, down nearly 17 per cent from its previous corresponding year ending January 1.
Had it not been for the one-off cost to Dick Smith, Woolworths Group net profit would have been up 3.2 per cent to $1.18 billion.
The Dick Smith brand has been under performing for some time and last month Woolworths Group announced it was looking to sell off the electronics chain.
There are already several perspective buyers.
“We look to release capital from the sale of real estate and the exit from our non-core consumer electronics business, Dick Smith,” Woolworths Group said in a statement. “We continue to seek to optimise our returns on capital over time.”
Dick Smith actually experienced a marginal sales revenue growth of 0.6 per cent to 873 million but earnings before interest and tax (EBIT) dropped 2.5 per cent to 19.5 million.
EBIT after the restructuring provision was down $280.5 million.
Woolworths Group will not be exiting from the Australian consumer electronics space entirely with plans to continue distributing products through its larger chain store, Big W.