Wesfarmers slides. Well, well, no profit histrionics for Coles owner Wesfarmers this morning after reporting a tiny 1.2% rise in December half-year net profit to $1.4 billion, thanks to its Woolies killer, hardware chain Bunnings (and with Officeworks assisting). Revenue rose 4.7% to $33.5 billion in the half year to December 31. Despite the weak earnings performance, Wesfarmers boosted the interim fully franked dividend to 91 cents, up 2.2% on that paid for the December, 2014, half year (89 cents a share). The group was held back by its coal and industrial interests, where earnings before interest and tax slid 88% to just $22 million from $180 million.
Coles lifted its EBIT by 5.6% to $945 million. Bunnings and Officeworks had a 13.8% jump in EBIT to $760 million and the department stores (Kmart and Target) saw a 9.5% rise to $393 million. This morning’s profit statement was preceded by an announcement late yesterday that Wesfarmers was merging Kmart and Target into the one business, with Kmart boss, Guy Russo gets the top job and Target boss, Stuart Machin continues at Target until July and then goes elsewhere in the Wesfarmers empire. This morning’s results revealed why: Kmart lifted sales revenue 12.6% in the six months (it is on another planet compared to all other Australian retailers) and earnings were up 10.4%. Target grew sales 1.9% and EBIT was up 5.7%. Kmart’s performance will be the best by any type of department store this half year. -- Glenn Dyer