Wesfarmers Profit Halves in Wake of Homebase Retreat

Published in

Wesfarmers’ annual profit halved as a result of more than A$1bn in write-offs linked to the sale of Homebase, the Australian retail-to-industrials conglomerate’s disastrous foray into the UK DIY market, the Financial Times reported. The company said on Wednesday that full-year profit for the 12 months through June fell 58 per cent to A$1.2bn (US$861.4m). But it posted strong results from its core Australia and New Zealand businesses, with profit at its continuing operations rising 5.2 per cent to A$2.9bn, slightly ahead of consensus forecasts. Investors welcomed the improved performance, which came ahead of the planned spin-off of the Coles supermarket business later this year, pushing Wesfarmers’ shares up as much as 4.2 per cent to a record high of A$52.70. Rob Scott, Wesfarmers managing director, said the group had taken decisive action to reposition its portfolio of businesses, which would deliver sustainable earnings growth. Read more. (Subscription required.)