GOVERNMENT BUYS 20% OF WOOLWORTHS

The South African government now owns 20% of South Africa’s favourite luxury grocery retailer.

The state-owned Public Investment Corporation (PIC) has acquired 20.248% of the Woolworths Group’s ordinary shares.

The PIC has increased their share interest in the group from last year’s full-year results of 15.1% to now. The PIC’s interest in Woolworths is now even bigger than that of Allan Gray, making it the largest shareholder.

According to a formal notice released by the PIC, Woolworths’ share price hit its lowest point since 2022, which represented a good investment opportunity for the PIC.

The group has lost almost 13% of its value over the last year because of challenges it's currently facing with its businesses in Australia.

Among the Woolworths group’s businesses, Country Road was the worst-performing unit. It’s profit before tax (PBT) fell by 160% from a profit of R400 million to a loss of R227 million.

In 2014, Woolworths bought David Jones for just over R21 billion, but sold the business in 2022 for only R1.6 billion.

The food sector within the Woolworths group is not holding back with profit as it reported an increase in its profit. It’s delivery arm, Woolies Dash has increased its number of dark stores to keep up with the demand.

Dark stores are stores used for delivery purposes only, and no customers can buy in there.

Image credit: Wikipedia