AUSTRALIA'S WOOLWORTHS LOOKS TO IMPROVED PROFITS Woolworths Ltd <WLWA.S> said policy, management and financial changes initiated during the 1986/87 business year should cause profits to reach more acceptable levels in 1987/88 end-February 1. Net profit reported earlier fell 85.3 pct in the year ended February 1. Results for the first month of the new year were encouraging after a period of uncertain consumer confidence and difficult trading conditions, it said in a statement. The Big W discount store division and New South Wales supermarkets produced very disappointing results, it added. Woolworths earlier reported a fall in net profit to 9.27 mln from 63.20 mln on sales of 5.47 billion against 4.83 billion. Capital spending for the year was 119 mln dlrs against 105 mln for the previous year with 50 new stores opened, but total sales were below target, Woolworths said. The company provided 20 mln dlrs against operating profit for the year to cover mark-downs on stock. Extraordinary items included a 53 mln dlr profit on the sale of properties and investments less a 28 mln provision for reorganising the Big W chain. Woolworths is unrelated to the U.S. Group F.W. Woolworth <Z.N>. It has been the subject of takeover speculation since <Industrial Equity Ltd> acquired a 20 pct stake last year. New Zealand's diversified investment group <Rainbow Corp Ltd> bought Safeway Stores Inc's <SA> 20 pct holding in Woolworths for 190 mln dlrs late last year. Safeway put its stake up for tender just in time to take advantage of changes in U.S. Tax laws effective from the end of December, informed sources said. Woolworths shares closed on Australian stock exchanges today at 3.50 dlrs, down five cents from Friday.