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I wonder what stake Wesfarmers will keep.

Have they decided all that capital is in the wrong game, what with Aldi expanding, Lidl coming, Costco here and who knows what Amazon will do with Whole Foods.

Find a less crowded room?

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alonso - that appears to be their issue, that the supermarket division has not sufficient potential for growth given the capital invested. No doubt an implied acceptance of the new entrants coming into the grocery market.

 

Have to say though that like Woolies Coles has an enormous advantage over the newcomers in that they have tied up just about every key location to operate a supermarket in. I'm not convinced that delivery services will reduce the importance of postion position position when it comes to grocery sales: already we are seeing that a lot of these food delivery services only exist by paying the delivery guys below the minimum wage and by not looking after super and leave arrangements. I suspect that the likes of Aldi and Costco are knocking off growth prospects for Coles supermarkets but Coles will retain a substantial franchise that should be able to provide reliable dividends.

 

Also, I would be interested in standalone Coles over Woolies for the simple fact that Woolies is the biggest operator of poker machines in Australia. I saw someone describe the gaming lobby as Australia's NRA. Sure both Coles and Woolies sell alcohol and alcohol also does tremendous damage to our community but you could argue that there are mitigating factors with Australia's national abuse of alcohol. I think there are no such mitigating factors for pouring their money into poker machines, and as such I see standalone Coles as a better option than Woolies if I had to have a blue chip grocer in my portfolio.

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The cost of being Coles:

 

"Coles accounted for about 60% of WesfarmersÃÆâ€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’‚¢ capital employed and 34% of divisional earnings."....

 

"Seeing Wesfarmers paid $19.3 billion for Coles Group back in 2007 (issuing 308 shares at $45.73 in the purchase, and then a second issue at $13.50 in 2009 raising $2.8 billion (after $2.5 billion was raised in 2008 at $29 a share) both in the depths of the GFC slump, plus the write downs at Target and HomeBase of more than $3 billion, the total cost of the Coles adventure is probably well north of $30 billion.

It is very hard seeing that price being reached in the spin off."

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Dividends - always 100% franked

 

05 Apr 2018 Interim - 103c

28 Sep 2017 Final ---- 120c

28 Mar 2017 Interim - 103c

05 Oct 2016 Final ----- 95c

07 Apr 2016 Interim -- 91c

30 Sep 2015 Final --- 111c

02 Apr 2015 Interim -- 89c

16 Dec 2014 Special ---25c

09 Oct 2014 Special ---10c

09 Oct 2014 Final ---- 105c

02 Apr 2014 Interim -- 85c

27 Sep 2013 Final --- 103c

28 Mar 2013 Interim -- 77c

28 Sep 2012 Final ---- 95c

30 Mar 2012 Interim -- 70c

30 Sep 2011 Final ---- 85c

31 Mar 2011 Interim -- 65c

30 Sep 2010 Final ----- 70c

31 Mar 2010 Interim -- 55c

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  • 2 weeks later...
Wesfarmers has hired investment bank Lazard to sound out potential buyers for its loss-making British hardware chain.
https://www.theaustralian.com.au/business/c...ad758c69369af59

 

Analysts have already warned that any sale of Bunnings UK could trigger further losses. Citi analyst Bryan Raymond has calculated a Bunnings UK exit would cost between $1.1bn and $2.2bn pre-tax, translating to $1 and $2 a share. A decision on a sale is expected in coming months

 

 

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  • 1 month later...
Wesfarmers confirmed it had agreed to sell the Bunnings UK and Ireland business to retail turnaround specialists Hilco Capital.

 

In a statement to the ASX, Wesfarmers said it expected a loss of between $354 million and $406 million on its 2018 financial results, subject to a review by its auditors.

 

Earlier this year, Wesfarmers wrote down the value of the Homebase business in the UK it bought two years ago for $700 million by $1 billion.

 

Wesfarmers is in effect giving away the business, and the Bunnings name will disappear from the UK retail landscape.

 

"Under the terms of the agreement, the buyer will acquire all Homebase assets, including the Homebase brand, its store network, freehold property, property leases and inventory for a nominal amount," Wesfarmers said.

 

However, the company will maintain some skin in the game where it is entitled to 20 per cent of any equity distributions from the business should Hilco manage to sell the business in the long term.

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  • 2 months later...
The Rob Scott garage sale is continuing apace with capital employed including the impending Coles demerger now down $15.5bn, from $27bn pre-ScottÃÆâ€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 appointment last November.

 

The 57 per cent fall in capital has come at a cost of just 34 per cent of earnings, so on an accounting basis he has done well.

 

YesterdayÃÆâ€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 sale of the 40 per cent stake in Bengalla to the only natural owner, New Hope, at $860m was clearly a good deal for what had become a stranded asset.

 

For the first time this century, Wesfarmers now has no coal ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚­assets 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’‚¬Ãƒâہ¡ÃƒÆ’‚ and the divestment list will continue with Kmart Tyre and Auto and the Coles pubs yet to come.

 

Return on capital will increase and, with $2bn of debt going to Coles by the yearÃÆâ€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 end, Wesfarmers will be debt-free.

 

By some counts Scott is a hero because he has proved decisive, but the real test is yet to come on two counts.

 

The $56bn company is trading at a 19 times forecast 2019 earnings of $2.61 a share and the real value of the sales will only be measured by the increase in value after the sales or, in the case of Coles, whether as a standalone entity it is worth more in shareholder hands.

 

On these counts the scorecard is not so clear-cut.

 

The bottom line is that ScottÃÆâ€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 real value will be measured more in what he acquires than in his ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚­effective breakup of the empire.

John Durie - The Australian
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Wesfarmers' annual bottom-line profit plunged 58.3 per cent to $1.19 billion after the conglomerate booked $1.4 billion in losses and write-downs from discontinued operations including its disastrous foray into the UK hardware market and wrote down the value of Target by $300 million.

 

Excluding impairment charges and one-off items, Wesfarmers' underlying net profit from continuing operations rose 5.2 per cent to $2.9 billion in the year ended June 30 - beating consensus forecasts of about $2.78 billion - as double-digit profit growth at Bunnings, Kmart and its remaining industrial businesses offset a weak first-half result at Coles.

 

Underlying earnings before interest and tax from continuing operations rose 4.5 per cent to $4.3 billion - compared with consensus forecasts of $4.23 billion - with Bunnings earnings rising 12.7 per cent to $1.5 billion, department store profits up 21.5 per cent to $660 million, Officeworks up 8.3 per cent to $156 million and industrials up 13.1 per cen tto $680 million.

 

Coles' EBIT fell 6.8 per cent to $1.5 billion for the year - beating forecasts between $1.27 billion and $1.49 billion - as a 14 per cent fall in first-half earnings offset a 3 per cent improvement in the June-half..

Wesfarmers kept its final dividend steady at $1.20, taking the full-year payout to $2.23, in line with that in 2017

 

 

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WES has a 13.2% state in Quadrant

 

Santos to buy Quadrant Energy for $2.9 billion

Peter Williams and Peter MilneThe West Australian

Wednesday, 22 August 2018 4:57PM

 

Quadrant was formed in 2015 from the WA assets of US energy giant Apache and is jointly owned by Brookfield Asset Management, Macquarie Capital, Wesfarmers and Angela Bennett-linked AMB Holdings.

Wesfarmers said it would net $US170 million from the sale of 13.2 per cent stake. The interest had been acquired for $US100 million.

https://thewest.com.au/business/energy/sant...n-ng-b88936679z

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