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Australia's Woolworths Full-Year Profit Rises 27.5%

Australia's largest supermarket chain, Woolworths, posted a 27.5% jump in full-year profit, cementing its dominant position, and said it expects 2008 earnings to grow up to 23%.

Woolworths said its net profit rose to A$1.294 billion (US$1.069 billion) in the year to June 30, up from A$1.01 billion a year ago. Consensus forecasts were for a surge in net profit to A$1.29 billion, according to a Reuters Estimates survey of 11 brokers.

Last month, the retailer forecast net profit growth of 25% - 27%, as it continued to snatch market share from troubled rival Coles Group, which is being sold to conglomerate Wesfarmers.

Woolworths said net profit after tax in the current year was expected to grow 19% to 23%, and sales in the year to grow 7% -10%.

Earnings before interest and tax (EBIT) was expected to grow faster than sales in the year, it said.

Analysts had expected more moderate growth in 2008 for Woolworths, which has had acquisition hopes frustrated on two fronts.

Woolworths was thwarted in its plans to expand in New Zealand after the competition regulator rejected a proposed full takeover bid for general merchandise retailer The Warehouse. Woolworths has appealed the decision.

Woolworths also bid for two of Coles' general merchandise units at an auction in June, but lost out to Wesfarmers' offer for the entire company.

The company said on Monday it was well positioned for future growth.

"We plan to accelerate the reinvestment in our business in the coming year, with an accelerated roll-out of many new initiatives that we have been developing," Woolworths said in a statement.

Shares in Woolworths have risen 16.2% this year, beating a flat performance at Coles despite takeover activity, and a 7.9% rise in the broader market.

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