Wesfarmers group defies retail slump with revenue up 5.8% to $58.1bn for FY12.
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Full year earnings before interest and tax to 30 June (EBIT) rose almost 10% to $3.5 bn.
Wesfarmers group said its retail brands enjoyed a record year, and Coles enjoyed “strong earnings growth” – rising 16.3% to $1,3bn, while Kmart earnings also rose over 31% to $268m, with an increase in transactions and units sold.
Net profit for the Wesfarmers group soared almost 10% to $$2.1 bn compared to FY 2011.
Officeworks also bucked the retail trend, as earnings rose 6.3% to $85m, despite price deflation and other trading challenges.
However its online channel experienced strong growth with both store and web sales “well up” on 2011.
Operating revenue was $1.5bn – 0.7% from same time last year.
The focus on the strategic agenda drove Officeworks transaction growth during the year, and offset heavy deflation and “generally challenging trading conditions, particularly in technology related areas,” Wesfarmers said in a statement.
Discount retailer Target was also affected by the “difficult” trading conditions in consumer electronics, with underlying earnings of $284 million, in line with the prior year.
However, it was forced to make a one-off $40m provision for future supply chain restructuring, pushing its earnings lower to $244m – or over 12% year-on-year.
“Underlying earnings were maintained through a focus on the profitability of promotionsand lower levels of clearance activity due to better inventory management,” Wesfarmers said.
Managing Director Richard Goyder said the Group’s results was pleasing with all divisions achieving improvements in underlying performance and strong growth in the Group’s operating cash flows.
“During the year all of our retail businesses worked hard to deliver better value and improved merchandise offers for customers, while investing to renew and grow their store networks and improve supply chains.”
“These initiatives were rewarded with increasing customer numbers and units sold, more than offsetting price deflation impacts, including from our reinvestment in lowering prices.”
Wesfarmers also increased the final dividend to 95 cents per share fully-franked, taking the full-year dividend to 165 cents per share, compared to 150 cents per share last year.
Wesfarmers’ free cash flow situation also rose a massive 41% to $1,472bn, which including $402 million of proceeds from the sale of its Premier Coal mine.
