Woolworths offers everything from shoe polish to pick-and-mix sweets

A �60.9m charge to cover the cost of getting rid of its Big W store brand pushed pre-tax profits down to �9.3m ($17.5m) from �66.7m a year ago.

Excluding exceptional items, profits rose to �73.1m, in line with forecasts.

Woolworths is currently considering a �837m takeover bid from private equity firm Apax.

"We're working very closely with Apax... and we're hopeful they can come up with the goods by May 5th," Woolworths chairman Gerald Corbett told the BBC.

Opportunity

Woolworths said it had suffered from slow sales over Christmas, adding that its decision to deck out stores for the festive season in October had "exacerbated" the problem.

Concentrating on toys and gifts - which suffered from weak sales during the period - had delivered sales "below that of the displaced ranges", it added.

Woolworths said the current retail trading environment "is difficult, impacting both sales and margin".

However, it said it saw "plenty of opportunity" to improve performance of the business.

The group expects to have a busy Easter - one of its key trading periods - forecasting sales of 30 million Easter eggs.

In an effort to boost sales in the year ahead, Woolworths said it would be refitting 50 stores across the UK at a cost of �3.3m.

The group said last year it was to scrap its Big W out-of-town brand, a move which has seen it put some stores up for sale and rebrand others under the Woolworths name.

Woolworths said it was taking an exceptional charge of �60.9m to cover the ending of Big W, which included "the cost of stock write downs, property impairments, redundancy and consultancy fees, partly offset by disposal proceeds".

The firm said it was not declaring a final dividend because of the talks with Apax - but added it would do so if the talks failed to produce an offer.