Bunnings is opening new stores as Wesfarmers bets on a strong housing market

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Wesfarmers released its half year results today. Revenue is up but net profit has slipped. That will fix itself once the now-departed insurance business, bought by IAG, is off the books.

One area of rapid growth in stores and in revenue is Bunnings, the home of the handyman and the professional tradie.

Some of this growth is being driven by record low interest rates and a healthy housing market for new and established houses.

Revenue from the Bunnings business rose 11.8% to $5 billion in the six months to the end of December. Earnings before interest and tax was $618 million, about 10% higher.

The strong sales are across Australia in both consumer and commercial areas.

And it’s getting better. As the year closed, sales accelerated, increasing 12.6% in the final three months.

Bunnings says price makes a difference

Bunnings has been running with a program to strengthen core business elements and focus on the drivers of growth.

The company says these are the three key elements of a winning offer: price, range and service.

Adding more stores also helped revenue, with 12 new outlets opened over the six months including eight new Bunnings Warehouse stores, one smaller format Bunnings store and three trade centres.

Bunnings now has 228 warehouses, 63 smaller format stores and 33 trade centres operating in the network across Australia and New Zealand.

20 new Bunnings Warehouse stores are expected to open in the 2015 financial year with similar numbers in 2016.