Wesfarmers’ brief, expensive and ultimately failed foray into the British home improvements market has dragged down its full-year profit by almost 60 per cent to $1.2 billion.
Homebase, the Bunnings British operation that was sold earlier this year for the token amount of one pound, carved $1.4 billion off the profit.
However, that wasn’t the only hit to Wesfarmers’ bottom line, with earnings at its Coles supermarket chain falling 7 per cent to $1.5 billion.
Underlying earnings, after stripping out one-off items, was down a more moderate 3.5 per cent to $2.8 billion on last year, but ahead of market expectations.
Wesfarmers managing director Rob Scott said it had been a significant year for change at the conglomerate.
“Decisive actions [have been taken] taken to reposition the group’s portfolio to deliver sustainable growth in earnings and improved shareholder returns,” Mr Scott said.
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.
“The proposed demerger of Coles, and the divestments of Curragh [coal mine] 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.”
Earnings from the company’s continuing operations rose 5.2 per cent, while overall sales revenue was up 3 per cent to $66.9 billion.
The company has maintained the full-year dividend at last year’s level of $2.23 per share.