Wesfarmers profit slumps 57 per cent after Bunnings UK disaster
Wesfarmers's full-year profit has slumped almost 57 per cent after the retail conglomerate suffered heavy losses from its disastrous attempt to expand Bunnings into the UK and Ireland.
The group, which also owns Coles, Kmart, Target and Officeworks, reported net profit after tax of $1.19 billion on Wednesday, down from $2.77 billion a year earlier.
Wesfarmers abandoned its northern hemisphere Bunnings expansion in May, after burning more than $1.7 billion on the foray, and also sold its remaining stake in the Curragh coal mine during the financial year.
Removing these discontinued operations and a $306 million write-down and target from the result, net profit after tax was $2.9 billion - up 5.2 per cent from last year.
Managing director Rob Scott, handing down his first full year result, said 2018 had been a year of significant change with the group repositioning its portfolio of businesses to deliver higher shareholder returns.
Wesfarmers intended to demerge its largest business, the $20 billion supermarket chain Coles, later this year after deciding its earning were not growing fast enough.
"The three key priorities for the year were to address areas of underperformance, reposition the portfolio and drive opportunities for growth, with good progress made against each of these,” Mr Scott said.
“The proposed demerger of Coles, and the divestments of Curragh and [Bunnings UK and Ireland] during the year, demonstrate a disciplined approach to capital allocation and portfolio management, and will reposition Wesfarmers for the next decade."
More to come