subscribe to our newsletter

SMSF investors told to hold on to Woolworths stocks

Miranda Brownlee
04 July 2019 — 1 minute read

With Woolworths announcing plans to either split or sell off its gaming and hotel business, this is likely to lead to upside for current shareholders, says an investment analyst.

In an ASX announcement this week, Woolworths announced an agreement to combine its drinks and hospitality businesses, Endeavour Drinks and ALH Group, into a single entity, which is expected to be referred to as Endeavor Group Limited.

Following the combination, Woolworths said it intends to pursue a “separation of the business through a demerger or other value-accretive alternative”.


Wealth Within chief analyst Dale Gillham said any time a company splits off part of its operations, the share price of the original entity will fall in value as the value of the additional or new entity is now separate and as such has its own value; however, the shareholder will not be disadvantaged as they will now hold share in two companies.

“Splitting a company can often be a very positive move for the original holding company as it can focus on its core business. For example, when Woolworths got rid of Masters, this got rid of an entity that was having a negative effect on the share price of Woolworths,” Mr Gillham explained.

“If Woolworths split off the gaming and hotel business, I think this could not only be again very good for Woolworths longer term but also open up opportunity for shareholders to gain even more value in holding the gaming and hotel entity. Australians are big gamblers and this part of Woolworths business is very profitable, and so I can only see upside for current shareholders.”

If Woolworths decides to sell rather than split off the gaming and hotel business, this would inject some significant capital into Woolworths, he said, that could fund a war chest in their fight against the foreign supermarket chains that have come and are coming to Australia.

“The impact that Aldi and others is having on the supermarket industry in Australia is significant and this will only increase over time. Therefore, I see Woolworths getting back to focus on its core business is critical to its long-term success,” he said.

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

SMSF investors told to hold on to Woolworths stocks
woolworths smsf
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

Arm yourself with the critical information that you need to ensure you and your clients continue to thrive in today’s changing environment at the free-to-stream SMSF Adviser Technical Strategy Day. Live streamed directly to you in October over three days, this event is jam-packed with expert-led sessions to arm you for success by providing the latest updates on regulatory and legislative changes impacting SMSFs. Secure your free spot today, visit www.smsfstrategyday.com.au

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?


Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.