Australia-Farming Giant posted a good return for the half year.
AUSTRALIA-FARMING GIANT HAS GOOD YEAR.Wesfarmers posts $879m profit
Wesfarmers has posted a $879 million half-year profit, coming in at the upper end of the earnings band it flagged last month.
The result should provide a boost to the company in its effort to woo shareholders to buy into a three-for-seven share rights offer to raise $2.9 billion, which will be put towards reducing the company’s debt.
Wesfarmers forecast its interim profit would land in the $850 million - $880 million range.
In recent trading, Wesfarmers shares were up as much as 29 cents, or 1.8pc, to $16.44.
In its latest statement, the company declined to provide specific financial guidance for the rest of the year, saying only that the turnaround of the Coles supermarket business would gather pace in the second year of its five-year turnaround strategy.
For its supermarkets, Target stores and Bunnings stores, the company said figures since the start of 2009, which are not covered by the latest results, showed a positive trend.
After a $150 million write-down last month, the company announced it had completed its impairment testing and did not need to reduce the carrying value of its assets any further..
"Despite the impact of a tougher consumer environment, the group’s retail businesses have generally weathered the downturn well and the Coles turnaround is gathering momentum," managing director Richard Goyder said in a statement.
During the second quarter, sales in the Coles food and liquor business recorded comparable store sales growth of 3.8pc, compared to 1.3pc growth a quarter earlier.
Net up 46pc
The net profit figure is 46..3pc up on a year earlier, but much of that difference reflects the fact that the $19.3b acquisition of the Coles Group was not completed until November 2007, most of the way through the previous comparable period.
The company confirmed it would pay an interim dividend of 50 cents, down from 65 cents a year earlier, in line with a more conservative dividend policy.
Mr Goyder said the Coles supermarket business had achieved a record Christmas trading period, which he linked to its fresh food offering.
In its Bunnings hardware business, the company posted a 13.8pc increase in earnings before interest and tax, with comparable store cash sales growth hitting 7.7pc.
At Officeworks stores, sales rose 3.9pc, but the company did not provide comparable store sales figures for that business.
In its Target general merchandise stores, comparable store sales growth hit 4pc, while Kmart recorded little change in sales, which the company declined to quantify.
