The Coles Group profit tanked

Jeff J Mitchell/Getty Images

Wesfarmers posted a 86.6% fall in net profit to $212 million for the half-year after $1.32 billion in writedowns relating to Bunnings in Britain and at its discount store Target.

Excluding writedowns, profit fell 2.7% to $1.53 billion.

The writedowns were foreshadowed earlier this month, with the plan to turn its acquisition of Homebase into a Bunnings branded network in the UK heading for a loss.

Revenue overall for Wesfarmers was up 2.8% to $35.9 billion over the six months to December. The company kept dividends flowing at a steady 103 cents a share.

Coles’ EBIT (earnings before interest and tax) fell 14.1% to $790 million for the half. Revenue was weaker at $19.98 billion, down 0.4%.

The company says the fall in earnings reflects investments made in the customer offer, lower property earnings due to a one-off gain in the prior year, lower financial services earnings following the sale of Coles’ credit card and lower fuel earnings.

Managing director Rob Scott says the continued strong momentum in Bunnings Australia and New Zealand, Kmart and Officeworks, in a competitive retail environment, was a highlight for the half.

He says the company generated record operating cash flows of $2.9 billion for the half.

Results by division:

Source: Wesfarmers

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