By David Winning and Mike Cherney

SYDNEY--Coles Group Ltd. reported a 2.8% rise in annual profit as it continued to benefit from shoppers spending more in its supermarkets during the Covid-19 pandemic.

Coles reported a net profit of 1.01 billion Australian dollars ($745 million) for the 12 months through June 27, compared with a A$978 million profit a year earlier. Annual revenue rose by 3.0% to A$38.93 billion.

Directors of the company declared a final dividend of 28 Australian cents per security, bringing the full-year payout to 61 Australian cents.

Looking ahead, Coles said it expects the rollout of Covid-19 vaccinations and in turn fewer lockdowns to support normalization of consumer behaviors in calendar year 2022, which could limit sales growth. But it said conditions in the fiscal first quarter remain volatile as Covid-19 outbreaks have led to multiple lockdowns across the country.

In supermarkets, sales in the first seven weeks of the fiscal first quarter rose 1.0% compared to last year but were up 12% on a two-year basis. In liquor, sales so far in the fiscal first quarter were flat compared to last year but up 19% on a two-year basis.

Coles said that the 2022 fiscal year will be significant for both capital and operating expenditure as it invests in the business.

Write to David Winning at david.winning@wsj.com and Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

08-17-21 1939ET