Woolworths Group Holdings has reported a 20.1% increase in gross sales in its “other” segment in the first half of FY23, saying this is largely due to the inclusion of MyDeal sales from September 23. The Group acquired MyDeal during the half.
“Other” includes Group functions such as a Property, Group overheads as well as Woolworths Group’s investments in data and tech firm Quantium, MyDeal and beverage conglomerate Endeavour Group. The company said these are not considered separately reportable segments.
Compared to Q2 F22 (prior to Woolworths Group ownership), MyDeal gross transaction value was broadly in line with the prior year according to Woolworths Group, with revenue increasing by 10% and trading in line with forecasts. This is also said to be buoyed by the inclusion of Big W’s range on MyDeal since August 2022.
Woolworths Group reported its EBITDA declined 41.0% to $8 million in “other”, saying this is due to MyDeal "trading losses", with no specific details shared. The EBITDA decline is also said to be due to an increase in advanced analytics investment, fewer property disposals than the prior year, and higher merger and acquisition (M&A) costs associated with recent transactions.
The group said the decline was offset somewhat by the non-recurrence of the Team Thank You payment of $34 million incurred in the prior year.
Depreciation and amortisation increased 14.3% to $93 million, largely due to higher depreciation on capital expenditure and the amortisation of acquired intangible assets relating to MyDeal.
Woolworths Group holds an 80.2% equity interest in MyDeal. MyDeal minority shareholders have a put option and the Group has an equivalent call option over the remaining 19.8% of the shares in MyDeal, which is exercisable after three years from the acquisition date.
“In the Other segment, excluding the contribution from Endeavour Group, LBIT is expected to be approximately $250 million for F23 (previously: $220 million) reflecting the inclusion of MyDeal and incremental M&A costs associated with recent acquisitions,” Woolworths Group CEO Brad Banducci said.