Wesfarmers’ full year profits plummet

Coles Supermarket AustraliaWesfamers’ full-year profit dropped 83.3 per cent to $407 million after it wrote down the value of its Target department stores and Curragh coal mine by $2.2 billion.

The group’s retail portfolio saw earnings before interest and tax of $176 million or 9.2 per cent, which it said was supported by “good Christmas seasonal trading in all businesses.”

Earnings for Coles supermarkets grew 4.3 per cent to $1.86 billion, while earnings from the Bunnings hardware chain increased 11.6 per cent on revenue growth of 21.4 per cent, with the newly acquired UK Homebase stores contributing from February 28.

Wesfarmers’ underlying profit for the 12 months to June 30, excluding the writedowns, dropped 3.6 per cent to $2.35 billion.

Coles’ food and liquor revenue grew $937 million, with comparable food and liquor sales up 4.3 per cent.

Bunnings’ store store growth was up 11.0 per cent and store-on-store sales up 7.9 per cent.

The hardware chain is set for further expansion across Australia and New Zealand, with 14 to 16 new Bunnings Warehouse stores expected to open in FY2016 and a further 16 to 20 in FY2017.

Discount department store had comparable store sales up 9.1 per cent.

Meanwhile, rival conglomerate Woolworths’ shares have been placed in a trading halt ahead of a likely announcement on the future of the supermarket giant’s troubled Masters home improvement chain.

“The trading halt is necessary in connection with developments concerning Woolworths’ home improvement joint venture businesses,” Woolworths chief legal officer and company secretary Richard Dammery said in a statement on Wednesday.

Woolworths says the halt should only last until Thursday, when it is set to announce full-year results that will include a previously announced $3.25 billion first-half writedown related to the hardware joint venture with US retailer Lowe’s.

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