News: COL Coles Group Targets About $1 Bln Of Cumulative Cost Savings By FY23

June 18 (Reuters) - Coles Group Ltd (COL) :

• COLES UNVEILS REFRESHED STRATEGY TO SUSTAINABLY FEED ALL AUSTRALIANS AND TO CREATE LONG-TERM SHAREHOLDER VALUE
• APPROXIMATELY $1BN OF CUMULATIVE COST SAVINGS TARGETED BY FY23
• NET CAPEX FOR FY19 UNCHANGED AT $700M-$800M
• MAINTAIN DIVIDEND PAYOUT RATIO
• COMPARABLE SUPERMARKET SALES GROWTH FOR Q4 EXPECTED TO BE IN UPPER HALF OF RANGE BETWEEN SECOND AND Q3 COMPARABLE GROWTH
• COLES EXPECTS TO RECOGNISE A NON-CASH GAIN IN RESPECT OF FAIR VALUE RECOGNITION OF ITS INTEREST IN QUEENSLAND VENUE CO JOINT VENTURE
• TO WILL OPTIMISE STORE NETWORK TO INCREASE SALES DENSITY AND IMPROVE PROFITABILITY, TAILORING UP TO 40% OF FLOOR SPACE IN STORES
• OVERALL NET GAIN IS EXPECTED TO BE BETWEEN $100M AND $140M FOR FAIR VALUE RECOGNITION OF ITS INTEREST IN QUEENSLAND VENUE CO JV
• RESTRUCTURING PROVISION RELATED TO SMARTER SELLING OF $15M-$20M TO BE INCLUDED IN FY19 ACCOUNTS
• REVENUE GROWTH EXPECTED TO BE AT LEAST IN LINE WITH MARKET GROWTH OVER NEXT FOUR YEARS
• AASB 16 LEASE ACCOUNTING ESTIMATED PRO FORMA BALANCE SHEET IMPACT ON FY19 FINANCIALS TO BE ADDITIONAL $8 - 9BN LEASE LIABILITY
• ALSO ESTIMATED PRO FORMA BALANCE SHEET IMPACT ON FY19 FINANCIALS FROM AASB 16 LEASE ACCOUNTING TO BE ADDITIONAL $7-8BN RIGHT-OF-USE ASSET
• WILL EXPAND ITS CONVENIENCE AND HEALTH OFFERINGS