Finance Finance News Markets & Shares Bunnings owner rides pandemic wave to $2.4bn profit

Bunnings owner rides pandemic wave to $2.4bn profit

wesfarmers profit
Bunnings is among the Wesfarmers businesses to have enjoyed a solid trading year. Photo: Twitter
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Wesfarmers leaders say lockdown impacts are mounting on staff and the company will pay a “material” cost to compensate thousands unable to work due to COVID-19.

The Bunnings and Officeworks operator vowed to keep paying wages to workers sidelined by COVID measures until at least December 31 and revealed shareholders could receive $2 billion under a proposed return of capital.

Managing director Rob Scott said almost 9000 Bunnings workers had been in isolation at some stage in the past couple of months.

“I’m less worried about the short-term profit impact. Our businesses are in great shape,” he said.

“What I’m most concerned about is the social impact, the economic impact and the mental health impact of prolonged lockdowns.

“That’s why we’re so committed to supporting our team at this critical time.”

The continued paying of wages to these affected staff would come at a material cost, he said.

However, Mr Scott cited many hundreds of calls to employee assistance lines as a reason for the support.

A disproportionate number of calls have been from employees younger than 30.

“That sheds an interesting light – some young people are doing it really tough,” Mr Scott said.

Wesfarmers lifted annual profit by 16 per cent after a strong year.

Net profit – excluding significant items related to the closure of multiple Target stores and the conversion of others to Kmart – rose to $2.4 billion in 2020/21, from $2.1 billion the year before.

“While COVID-19 had a significant impact on operations during the year, the group’s businesses maintained their focus on building deeper customer relationships and trust,” Mr Scott said on Friday.

“Bunnings, Kmart Group and Officeworks delivered strong sales and earnings growth.”

A 10 per cent rise in group revenue to $33.9 billion was mostly driven by customers working from home and generally spending more time at home during the coronavirus pandemic.

The Kmart operations recorded the biggest rise in pre-tax earnings at 69 per cent, followed by Bunnings at 19.7 per cent and Officeworks at 7.6 per cent.

“The retail divisions are well-positioned for the resumption of normal trading as (coronavirus related) lockdowns and restrictions ease,” Wesfarmers, which also owns online retailer Catch, said in a statement.

Wesfarmers shareholders will get a final dividend for the year of $1.78, up 17 per cent on the year before, taking the total payout for the year to $2.66.

The company also plans to return surplus cash to shareholders totalling $2.3 billion, or $2 per share.

But the capital return must first be approved by shareholders at an annual general meeting in October.

If approved, shareholders will get their money in early December.

Wesfarmers also owns a chemicals, energy and fertilisers division and an industrial and safety unit.

Shares on the ASX were down 2.72 per cent to $62.22 at 1155 AEST.