WLW Woolworths

RNS Number:2178N
Woolworths Group PLC
07 June 2005

                                AGM STATEMENT

                                7th June 2005


At the Woolworths Group plc Annual General Meeting to be held at 11.00am this
morning, the Chairman, Gerald Corbett, will give the following update on current
trading and the Group's development.

"Current trading has remained difficult and the outlook for consumer spending on
the High Street remains poor.  In the 18 weeks to 4 June 2005, Woolworths
Mainchain like-for-like sales decreased by 4.4 per cent.  Excluding
Entertainment (music, video, games and books), which suffered a comparatively
poor release schedule, like-for-like sales decreased by 0.3 per cent.  Overall,
the Woolworths gross margin was slightly down on last year.  Action has been
taken on costs to limit the impact of negative sales and margin on profitability
and space allocation in store has been changed to support product groups with
higher profit densities.

The store refurbishment programme is continuing to plan with the 11 stores
converted this year achieving their sales targets.  Sales and margin performance
throughout the 10/10 estate has continued to be ahead of the Mainchain.  We
continue to plan to convert 50 stores this year to the 10/10 format.

Third party sales at Entertainment UK for the 18 week period were up by 8.7 per
cent and the Company has recently succeeded in securing the contract to supply
Morrisons with music, video and games chart product.  2entertain, the Group's 40
per cent owned entertainment publishing joint venture with BBC Worldwide,
continues to trade in line with our plans.

Since the year end, further progress has been made with the disposal programme
of the out-of-town retail sites (formerly Woolworths big W) and the process of
selling MVC, the Group's specialist chain of entertainment stores, is well
underway.

Following the end of discussions with Apax in April, the Company has reviewed
its capital structure and financing.  Whilst the Group's cash generative
capability will continue to underpin a progressive dividend policy, there is no
current intention to return cash to shareholders through other means.  The Group
needs to maintain the financial capability to fund the seasonal build up in
working capital ahead of the peak Christmas period.  Given the high fixed rental
charge, uncertain retail outlook and the long-term importance of sustaining the
store refurbishment programme, the Board has concluded that any special cash
return to shareholders is inappropriate at this time.

We anticipate that the retail environment will continue to be challenging, and
against that background, the Board's focus will remain on controlling costs and
stock, generating cash and taking action to improve the Group's businesses."


                                    - ends -


For further information contact :-

Tulchan Group

Kate Inverarity              020 7353 4200

Celia Gordon-Shute           020 7353 4200



                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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