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Some more on Wesfarmers.

Wesfarmers has issued a profit warning for Target, saying the unitÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s full-year earnings may fall as much as 43 per cent.

TargetÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s sales perfomance in the second half had been disappointing, Wesfarmers said.

The unitÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s profit would also be affected by higher-than-expected shrinkage rates and increased costs for restructuring.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“While TargetÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s earnings for the current year will be disappointing, appropriate action has been taken to improve its future earnigns and competitive position,ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ Wesfarmers chief executive Richard Goyder said.

Wesfarmers shares fell 3.5 per cent to $42.66 in early trade.

 

 

Read more: http://www.smh.com.au/business/markets-liv...l#ixzz2TVbZeYz8

 

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finally it run out of steam. i was wondering for a while " how high the P/E that market can take this rally on". not much of growth going forward from here!!

 

 

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Not skilled in this matter, but I think there is some 'argy-bargy' with the shareprice as hedge funds acquire WESN, hoping to benefit from the difference if the Partially Prrotected shares don't convert. <$43.11 being a critical breach>

 

WES extended the lapse date associated with its Partially Protected Shares (ticker code: WESN) for a period of 12 calendar months. The new lapse date is now 23 November 2013.

 

The extension of the lapse date has been determined in accordance with the terms and conditions of the Wesfarmers Partially Protected Shares. These terms allow the Wesfarmers Board to extend the lapse date if the average of the S&P/ASX 200 Industrials Index (ticker code: XNJ) is less than 6,500 at the close of trading for each trading day during the two month period before 23 November 2012. Wesfarmers may exercise the right to extend the lapse date no more than four times. This is the second time the Board has elected to extend the lapse date.

 

The extension of the lapse date has no impact on the ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“capÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ and ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“floorÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ prices of the Wesfarmers Partially Protected Shares, which remain at $43.11 and $34.49 respectively.

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A measure of Australian consumer confidence fell sharply in May as households reacted negatively to the government's budget announcement, even after a cut in interest rates to a record low.

 

Read more: http://www.smh.com.au/business/markets-liv...l#ixzz2Tyie0AmI

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it still went up, after earning down grade and lower consumer confidence!! :unsure:

scratch my head with this one!!

 

 

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  • 1 year later...

Been looking at a few so called Blue Chips from a TA perspective.CCL,which was subject of a post a couple of weeks ago,is now on the skids.$6 or so a longer term target.BHP is just hanging in there.The betting is a fall to $30 then $28 or so.Could happen quite soon imo.WES chart has been sick fo a while.A fall to $36 seems fairly likely.

So,for the FA crew,there should be some opportunities in the next few months to buy a bit of value.

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Barely a week after gaining full control of the UK Homebase operation, the managing director Echo Lu ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ who was praised by Bunnings chief executive John Gillam in January for turning around Homebase's trading trajectory ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ departed soon afterwards and will be replaced by Bunnings' chief operating officer, Peter Davis. Homebase's finance director, Don Davis, commercial director, Paul Emslie, retail operations director, Ewan McMahon, and marketing director, Chris McDonough, also lost their jobs.

 

UK retail bible Retail Week said the executive cull was either an audacious "stroke of genius " or a "rash, arrogant manoeuvre".

 

After outlaying an initial $649 million, Bunnings is aiming to reverse a decade-long decline in sales and earnings at Homebase by spending $955 million over the next three to five years refurbishing stores, improving service, overhauling the product range and reducing prices. Bunnings sees scope to improve Homebase's sales per square metre, which are among the lowest of any retailer in Britain, by boosting the amount of stock in stores and widening product ranges, focusing on DIY and light-commercial markets, rather than home furnishings and decorator products.

 

Wesfarmers also plans to rebrand Homebase's 265 stores to Bunnings and is developing pilots for warehouse-style stores akin to those in Australia.

 

Analysts say Bunnings' strategy to stock more hardware products and fewer home furnishings means it will compete more directly with UK market leader B&Q and fear its decision to rebrand Homebase could alienate customers. Mr Gillam and Wesfarmers MD Richard Goyder have acknowledged expansion into Britain is not without risk but are confident that Bunnings will achieve an 18 per cent return on capital in the UK within three to five years.

 

- Here's hoping the poms can cope with change. Definitely a model aimed at moving stock, and they have the IT system to manage inventory down pat

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I own wesfarmers shares and it always makes me nervous when they buy overseas businesses.

 

They all seem to do it from time to time but the bulk fail terribly and burn a heap of shareholders money,maybe this one will be different but I doubt it as there is a few players in the uk market and they seem competent at the game,cheers mrbear

 

 

 

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Coles is headed for its 27th straight victory over Woolworths in same store sales, with Easter adjusted sales up 4.4 per cent for food and liquor and 4.5 per cent for food. Coles has now expanded sales for eight straight years. This was down from the 5.3 per cent recorded in the second quarter. The last quarter benefited from an early Easter and the fact it was a leap year, which added an extra trading day.

 

The good news for Coles was that liquor, for the first time in recent years, stopped being a drag on earnings, which shows John Durkan's remedial work is starting to have an impact.

 

Bunnings saw same store sales jump 8.3 per cent, down from 9.4 per cent the previous third quarter, but up from sales increases for the rest of the year.

 

Kmart continued to trade strongly.

 

Target sales rose just 1.4 per cent.

 

Office Supplies also saw a slowdown in sales increases to 5.6 per cent in the quarter, down from nine per cent a year ago and 11.8 per cent in the second quarter.

 

The Coal division reported a loss of $118 million in the first half of the year and is headed for bigger losses in the second half based on lower production figures due to wet weather and other issues. To make matters worse, the company unwound hedges at the start of the year which means it won't get any advantage from the recent increase in both coal prices and the currency.

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Wesfarmers Ltd. laid bare the potential pitfalls of owning assets as diverse as department stores and coal mines on Wednesday, saying it would take impairment charges of up to 2.3 billion Australian dollars (US$1.7 billion) after a slump in demand for key products.

The biggest write-down of up to A$1.3 billion will be booked against its discount store Target, which sells everything from toasters to children's T-shirts, but has been hurt by the arrival of foreign brands such as Zara and H&M to Australia's main street in recent years.

 

Wesfarmers said it would also take a noncash impairment charge of up to A$850 million against its Curragh coal mine in eastern Australia's Queensland state, which supplies Asian steel mills and power plants but has been bloodied by slumping prices of the commodity.

 

On Wednesday, Wesfarmers said it remained committed to both the coal-mining business and Target despite the magnitude of the write-downs which will reduce its earnings in the year through June, 2016.

 

"The decisions which we have outlined today reflect more difficult market conditions in both Target and Curragh, but we remain confident that operationally we have the right plans to improve future performances over time," Chief Executive Richard Goyder said.

 

Target has aggressively cut prices in a bid to attract shoppers back to its stores, but the business has continued to struggle. Last month, Wesfarmers said a probe into accounting irregularities at Target had found its first-half earnings to be overstated by A$21 million.

 

"Whilst Target has made operational progress in recent years, market competition and disruption has continued to accelerate," Mr. Goyder said.

 

Wesfarmers now expects Target to record an underlying A$50 million loss in the current financial year plus A$145 million of restructuring costs and provisions as management needs to offer discounts to shift surplus stock that didn't find favor with shoppers. Its problems have been compounded by unexpectedly warm autumn weather, particularly in eastern Australia, which has reduced demand for seasonal ranges like coats and hats.

 

In the mining industry, Wesfarmers has grappled with thermal coal prices tumbling by nearly a third over the past two years, as demand from China cooled and supplies increased from mines planned when prices were booming.

 

Wesfarmers' Curragh mine in Queensland's Bowen Basin produces around 8.5 million metric tons of coking and thermal coal annually, mostly for sale to Asia. A recent report by industry body the Queensland Resources Council indicated roughly one third of coal mines in Queensland are losing money.

 

Wesfarmers said its final dividend will be determined by the group's underlying profit, which excludes the impairment charges but includes the restructuring costs for Target.

some investment houses are coming out with dividend cut expectations

 

- Morgan Stanley analysts have lowered their EPS forecast by 7 per cent, & expects a 10 per cent cut in the dividend this financial year, from $2 to $1.80.

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