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Announcement of Buy-Back

Document date:  Wed 10 Nov 1999
Published:  Wed 10 Nov 1999 08:46:47
Document No:  154856
Document part:  A
Market Flag:  Y

HOMEX - Melbourne                                                     

Coles Myer Ltd (CML) has reported a 14.1% increase in profit after
tax (excluding abnormals), on a sales increase of 6.8%, for the 26
weeks to 25 January 1998.

Chief Executive Officer, Dennis Eck, described the Company's
performance as very pleasing and above plan.

($M)                     First Half   First Half Inc/(Dec) First Half
                            97/98       96/97               95/96  

Sales                     10,623.3    9,945.3     6.8%    9,440.2 
Retail EBIT*                 460.0      397.2    15.8%      328.5
EBIT before abnormals        433.1      415.8     4.2%      359.4
PBT before abnormals         388.6      341.3    13.9%      284.6
Profit After Tax**           252.6      273.6    (7.7%)     194.5
PAT before abnormals         261.3      229.0    14.1%      194.5
EPS (cents), before           22.8       20.2    12.9%       17.2

* Earnings before interest & tax from retail operations.
** Includes abnormals: F98 ($13.6 million) in Y2000 compliance 
costs versus F97's $44.6 million gains on property sales.


* Retail EBIT increased by 15.8% and was the best since 1989.

* Retail EBIT margin improved 0.3% to 4.3%.

* Profit after tax increased at a faster rate than sales, reflecting
improved shareholder value.

* Food & Liquor EBIT up 20.8%, General Merchandise up 40.5% & Myer 
Grace Bros up 15.6%. While down by 4.2% Apparel & Home achieved a 
7.2% EBIT margin rate. Target was on plan.

* Fully franked dividend of 12.5 cents per share (up 0.5c) is payable
on 11 May.

* Retail innovation continues. 

* Shared Services are increasingly attending to brand infrastructure

Retail Margins             1997/98            1996/97

Food & Liquor               3.5%                3.2%
General Merchandise         3.7%                2.7%
Apparel & Home              7.2%                7.8%
Myer Grace Bros             5.4%                4.9%
Coles Myer Ltd              4.3%                4.0%

Food & Liquor sales increased 10.8% with comparable stores up 8.7%.
Profit was up 20.8%, or $34.7 million to $201.8 million. "The profit
increase at around double the sales rate is an outstanding result"
Eck said.

General Merchandise profit increased by 40.5%, or $19.3 million to
$66.9 million, reflecting a more profitable margin mix in Kmart and
reduced losses in Officeworks and World 4 Kids.

Target was on plan at $94.9 million although Apparel & Home profit
declined by $4.2 million. This reflected a competitive market
(particularly in consumer electronics), some poorer performing
apparel areas, and one-off start-up costs associated with a new
Distribution Centre. Katies continued to experience difficulty but
improved in the second quarter. Fosseys restructuring continues and
is nearly complete. The brand recorded a reduced loss for the half.

Myer Grace Bros, based on a 3.7% sales increase, added $13 million
profit, or 15.6% to achieve $96.1 million. Newly emphasised
departments are performing well.

Dennis Eck said: "Shareholder value is being improved by:- 

* An orchestrated approach to what brands sell profitably. 
* Benefits flowing from the Shared Services strategy.
* The ability to gain profit at a greater rate than sales. 
* Returns in excess of the cost of capital.

"Innovation and a focus on the customer is intensifying across all
brands and within our Shared Services areas. Technological innovation
has continued with the start of the roll-out of the company's
combined front end and back office system, known as the New Store
Environment, commencing with Coles.

"We are now establishing our Distribution centres according to
product type rather than by retail brand."

"At Kmart we continue to work to grow profitable sales."

"I'm very encouraged that Myer Grace Bros has recorded three first
half years in a row of improving operating margins."

"We continue to seek further opportunities with Target. At a margin
of 8.7% it remains one of the strongest performing retail brands in

Dennis Eck, said: "Management has delivered on sales expectations
over each of the past six quarters and on profit for each of the last
three half years."

"We thank our staff, suppliers and our customers for their support."


"With this result we anticipate that unless there is a significant
change in economic conditions, growth in profit after tax (excluding
abnormals) will be at a double-digit rate and approximately twice the
rate of sales growth."

"The impact of Asia's financial uncertainties is difficult to
forecast but at this point there has been no noted change to trading
conditions," he said.

The Board takes this opportunity to pass on its appreciation to staff
for their contribution to the result.

For further information contact:

Media:    Greg Every               03 9829 5435    0418 110 350 
Analysts: Rebecca King             03 9829 4520    0418 995 022