August 16, 2012
The Age
Wesfarmers said full-year net profit came in at $2.126 billion, boosted by a strong showing from its Coles supermarket chain.
Shares in the company jumped on the news, rising as high as $1.14, or 3.5 per cent, in recent trading to $33.63.
Net profit for the Perth-based conglomerare rose 11 per cent for the year and matched estimates from analysts.
The earnings growth was driven by the continued resurgence of the once struggling Coles division which recorded a 16.3 per cent increase in 2011-12 pre-tax earnings to $1.356 billion.
Revenue for the group, which also includes hardware store Bunnings, Kmart and other investments in coal and insurance, rose 5.8 per cent to $58 billion.
The group’s other consumer-focused business units also put in solid performances, with pre-tax earnings at Bunnings up 4.9 per cent to $841 million, and Kmart also showing strong signs of improvement as its pre-tax earnings lifted 31.4 per cent to $268 million.
But the general pull-back in consumer spending, dour consumer confidence and price deflation dented its Target division which reported a 12.9 per cent drop in pre-tax earnings to $244 million although this included a restructuring provision of $40 million.
Positive outlook
Wesfarmers said it expected the positive momentum at its Coles, Kmart and Officeworks chains to continue into 2012-13 while Bunnings would benefit from improved offerings and better service levels.
The company declared a final dividend of 95 cents per share, up from the 85 cents per share paid to shareholders in the second-half of last year.
Managing director Richard Goyder said the outlook for the group was positive, notwithstanding the expected continuation of subdued retail trading conditions and global economic uncertainty.
‘‘The group has a strong portfolio of businesses and a healthy balance sheet providing a good outlook for growth, both from within the existing group and from potential business expansion opportunities,’’ he said in a statement.
Coles out-performing
The flagship Coles business, bought by Wesfarmers in 2007 for $18 billion, reported a 6.4 per cent rise in revenue to $34.117 billion with its food and liquor division outperforming the market for the past three years, the company said.
Coles boss Ian McLeod said the nation’s No.2 supermarket chain had developed the platforms for its second wave of transformation which would include stronger supplier partnerships, an integrated loyalty platform, improved category management, and new and broader ranges of Coles private label products.
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