Wesfarmers Lifts Profit 19%, Announces A Special Dividend And Plans A $1.1 Billion Capital Return

Richard Goyder Photo: Getty

Diversified industrial group Wesfarmers posted a 18.9% rise in net profit to $2.689 billion for the year to the end of June.

The result includes the sale of the insurance division and disposal of the 40% interest in Air Liquide WA which together contributed $1.034 billion of after tax profit.

Overall, revenue was up 4.2% to $62.3 billion.

Managing Director Richard Goyder said it was pleasing to have recorded a solid increase in underlying profit in its centenary year.

“Growth in underlying earnings during the year was largely driven by stronger performances in Coles and Bunnings and lower financing costs,” he said.

The company declared a final fully franked dividend of $1.05 per share declared taking full-year dividends to $1.90, up 5.6%.

There will also be a special Centenary fully franked dividend of $0.10 per share, taking the full-year total dividend to $2.00.

And a capital distribution of $1 a share is planned, subject to final ruling by the Australian Taxation Office (ATO) and shareholder approval, which will return $1.1 billion to shareholders.

In the business divisions:

  • Coles earnings grew 9.1% to $1.672 Billion
  • Bunnings’ earnings increased 8.3% to $979 million
  • Kmart delivered earnings growth of 6.4% to $366 million
  • Officeworks’ earnings of $103 million were 10.8% higher
  • Earnings for the Chemicals, Energy and Fertilisers division of $221 million were 11.2% down due to factory outages
  • The Resources division’s performance was solid in “in difficult market conditions”, delivering earnings of $130 million or 12.2% down

Goyder says the group’s retail businesses are expected to grow as they develop and expand channel reach through the growth and optimisation of store networks and digital platforms.

He says Coles, Bunnings, Officeworks and Kmart all have good momentum as they lead into the 2015 financial year, while Target is expected to undergo significant change and improve as it progresses its transformation plan.

He says good market positions support a positive long-term outlook for the group’s industrial businesses.

Results by division:

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