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WES, WESFARMERS LIMITED
nipper
post Posted: Jun 3 2021, 08:47 PM
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Wesfarmers said sales had fallen at some of its retail businesses and growth had slowed at others as they cycled a boom in spending on hardware, technology and homewares at the height of the pandemic last year.
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Year on year sales growth had generally moderated and been negative in some months for some businesses, due to elevated activity in the prior year, the company said in a high level trading update released at its annual strategy day on Thursday.
Online growth had moderated as customers returned to bricks and mortar stores and online penetration, ecommerce sales as a percentage of total sales, had fallen but remained above pre COVID levels. For example, Bunnings online penetration had dropped below 2 per cent from 3.1 per cent at the end of December, while gross transaction values at Catch Group had been negative in recent months.

Wesfarmers chief executive Rob Scott did not provide sales figures and did not elaborate on the performance of individual businesses, saying only that the group was experiencing significant volatility in monthly sales results.
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Rob Scott was confident about the group prospects for growth and happy about the quality of its portfolio following the demerger of Coles, the sale of coal and other assets, derisking Target by closing stores and slashing its cost base, and the restructure of industrial and safety supplier Blackwoods.
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We think we have a phenomenal mix of businesses that represent a unique balance between defensiveness and high cash generation and good growth perspectives, he said.

Mr Scott and chief financial officer Anthony Gianotti hinted that Wesfarmers, which is cashed up after selling two thirds of its 15 per cent stake in Coles for more than $2 billion, was closer to returning surplus capital to shareholders, saying they were evaluating options to right size the balance sheet and get capital back to investors.
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I have consistently said it is unlikely we'll go out and do a really big acquisition, because often big acquisitions are very expensive and not in the best interests of shareholders, Mr Scott told the Financial Review.
In terms of right sizing the balance sheet, we acknowledge that we have plenty of capacity at the moment. We're also not sitting on surplus franking credits, so if we were to get cash back to shareholders in a tax effective way we would need to consider a capital return which would require Tax Office approval and shareholder approval and those things take time.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 5 2021, 03:05 PM
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Wesfarmers had a presentation at a conference today.. update talking about digital strategy and a few surprises.

Bunnings still expanding its footprint and service offering to commercial trades:
• Expanded supply and install product offer for builders
• New trade service desk format and more trailer parking spaces
• Increased PowerPass app functionality and engagement
• Opened new format Adelaide Tools store in Parafield, South Australia (March 2021)
• Agreement to acquire Beaumont Tiles in April 2021 (subject to conditions, including regulatory approval)

There is a lot about online marketing: a focus on leveraging data and digital platforms to develop new revenue streams. Including Catch.
Divisional online penetration has been increasing y.o.y. and ranges from 37% for Officeworks (up from 29%), Target at 16% up from 7%, KMart at 8.7% up from 3.7% while Bunnings, at 3.1% from almost nothing, is the laggard. (But I would kind of expect that for hardware)

And the Mt Holland lithium project, including mine, concentrator on site and refinery at Kwinana: Wesfarmers’ expected share of total project capital expenditure estimated at approximately $950m
• Indicative construction timeline, subject to approvals:
... Project construction to commence: 2H CY21
... First production from refinery: 2H CY24



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Apr 23 2021, 03:30 PM
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there is e-commerce and there is e-commerce
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The Bunnings website attracted on average 13 million visits a month in 2017 and 15 million a month in 2018, even though the retailer did not have an online store at that stage.

In 2019, website visits rose to an average of 19 million a month, boosted by the launch of a fully transactional e-commerce site and marketplace.

In 2020, website visits grew to more than 30 million a month and the level of interest had remained strong into 2021 ....
I am glad they got it right!!

In addition, Bunnings has created more than 750 how-to videos to date for its website and YouTube channel. Bunnings is filming the fourth series of a home renovation show that has helped Australia’s largest home improvement retailer boost sales by inspiring customers to undertake DIY projects, large and small, in their houses and gardens.
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Two years ago, Bunnings bought and renovated a home in the Melbourne suburb of Knoxfield to create fresh DIY content for its website and YouTube channel. The home was also used to create a TV series, Make It Yours, which aired on the Seven Network.

It still owns the Knoxfield property but sold two other properties renovated in previous seasons soon after filming finished.

This year, Bunnings is renovating the homes of Bunnings staff, transforming different rooms and gardens in several houses, rather than renovating a single home, showing customers how to transform their living spaces.






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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Aug 20 2020, 10:27 AM
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Wesfarmers reported a 7.4 per cent increase in underlying net profit from continuing operations to $2.08 billion as strong profit growth at Bunnings and Officeworks offset weaker earnings from Target and the industrials businesses.

Wesfarmers slashed the value of Target by $525 million, or $437 million after tax, and booked $110 million or $83 million net in restructuring costs. It also booked a $310 million impairment ($298 million net) against the value of the industrial and safety businesses. These large one off items were partly offset by a $290 million gain on the sale of a 10.1 per cent stake in Coles and a $220 million revaluation of its remaining 5 per cent stake.

Revenues grew 10.5 per cent to $30.85 billion, beating consensus of $30.3 billion, underpinned by strong sales growth at Bunnings, Kmart, Officeworks and online retailer Catch Group. Bunnings and Officeworks sales soared as consumers forced to spend more time at home stocked up on home office equipment, educational needs, and hardware and gardening supplies, while Catch has benefited from the acceleration in online spending during the pandemic.

Bunnings profits rose 13.9 per cent to $1.8 billion, and Officeworks profits were up 13.8 per cent to $190 million, but Kmart Group profits fell 23.5 per cent to $413 million despite the Catch acquisition. Kmart delivered solid sales growth of 5.4 per cent despite volatile trading conditions, but Target sales fell 2.6 per cent.
In the chemicals, energy and fertilisers business, earnings fell 9.2 per cent to $393 million, while industrial and safety profits plunged 53.5 per cent to $40 million.

Online sales across the group rose 60 per cent to $1.5 billion, or $2.1 billion including Catch, which is part of the Kmart Group.

Plans were announced in May to close between 10 to 25 large format Target stores, convert between 10 and 40 large format stores into Kmart, swap 52 Target Country stores to small format Kmart stores, and significantly reduce Target store support office staff.

Wesfarmers kept most of its retail stores open during the first national lockdown in April and May, when strong demand for hardware, homewares and home office equipment boosted sales. However, Kmart and Target have been forced to close in Melbourne during stage 4 restrictions and Bunnings and Officeworks are open to trade customers only for six weeks, forcing the retailers to rely on online operations to generate sales.

Wesfarmers did not receive material Australian government support payments and is not currently part of the JobKeeper program. One small entity was eligible for JobKeeper but this application was withdrawn. Wesfarmers received approximately $40 million in wage subsidies outside of Australia, almost entirely in New Zealand, where it was forced to temporarily close Bunnings stores to the public.


Wesfarmers will also pay a final dividend of 77¢ a share, plus a special 18c dividend arising from the sale of the 10.1% share of Coles.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Aug 4 2020, 10:13 AM
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Surprised that WES didn't take a hit on the open this morning.
Given that about 15% of their stores in Vic metro area are closed to the public, you would think the market would take a slightly less sanguine view of WES.
Mick



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nipper
post Posted: Jun 13 2020, 11:06 AM
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Is Wesfarmers heading to a sales cliff?
https://www.sharecafe.com.au/2020/06/10/is-...-a-sales-cliff/

Yes and no.
QUOTE
Sales growth has come at a cost. [A broker] points out the incremental margin on the latest sales is 14.5%, lower than what would normally be expected with such strong growth. The broker expects this situation will continue in the second half.

Costs were higher at Bunnings, as around $20m was invested in cleaning, security and protective equipment over the past three months....

Every business has carried these costs. Is the advantage WES gained now grafted in, is a better question. And supply line reliance, with related reliability, on Chinese product is lurking. Saved by a stronger AUD, is one bit of upside for margins.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


nipper
post Posted: Jun 9 2020, 09:11 AM
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In a trading update on Tuesday, Wesfarmers said sales atBunnings had risen 19.2 per cent in the June-half to date, after 5.8 per cent growth in the December-half, lifting sales so far this year by 11.3 per cent. Officeworks sales have risen 27.8 per cent in the June-half, following 11.5 per cent growth in the December half, lifting year-to-date sales by 19.3 per cent.

At online retailer Catch Group, acquired a year ago, gross transaction values soared 68.7 per cent in the June-half, up from 21.4 per cent growth in the December-half, lifting sales so far this year by 43.7 per cent. Wesfarmers' total e-commerce sales, across all divisions, rose 89 per cent as consumers ordered online to avoid the shops.

However, the strong sales growth will not flow straight through to the bottom line. More than $20mill spent on cleaning, security and protective equioment, plus $70mill down from total closure of NZ Bunnings stores



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 8 2020, 10:00 AM
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QUOTE
Wesfarmers chief executive Rob Scott said the conglomerate’s hardware chain Bunnings started from scratch with an online shopping platform just two years ago but was now “leading the way” in retail as customers gravitate to online in the wake of the coronavirus pandemic.

Following the demerger of Coles, Bunnings now generates just more than 50 per cent of Wesfarmers’ annual earnings and with the deteriorating performance of the conglomerate’s general merchandise chain Target and its industrials and safety divisions, the hardware chain’s contribution to profit is set to grow.

Mr Scott said Bunnings was leading the way in its roll out of online shopping. “Kmart and Target … achieved very strong growth in online sales and if I look at Bunnings, it is worth remembering that two years ago Bunnings didn’t have an online transactional capability and now in many ways I think Bunnings is leading the way around innovation in this area,’’ Mr Scott told a Macquarie conference. “The drive and collect model has been a fantastic initiative that has been adopted by Bunnings and Officeworks which essentially allows a customer to drive their car to a Bunnings warehouse store and one of our team members will drop the order off at the back of the boot.” Wesfarmers had also converted three Kmart stores to “dark stores” (distribution centres) to help support the lift in online demand. “It is worth noting that we have been able to win a number of new customers through this, so we are seeing that this is driving incremental sales and incremental customers to our business, not just cannibalising sales that would otherwise occur in the store.’’



Wesfarmers was also learning new digital skills from its recent acquisition of Catch.“We have seen very strong growth in sales in the Catch marketplace and we have also learnt a lot about the digital experience within the Catch business that we have been able to roll out in some of our other businesses,’’ he said. Wesfarmers, which is sitting on more than $2bn in cash following the partial sell down of its stake in Coles, would look to invest in online. “In terms of online investment we will very much be led by the divisions, and by the customer I guess, in how much we spend and how quickly we spend, we are seeing some great opportunities to invest in the digital space. “Interestingly, because a lot of software is cloud-based solutions, the upfront costs associated with a number of these are materially lower than they were five to 10 years ago. So a lot of the investment we are making is more opex (operational) than capex (capital) and you can get quite a lot of bang for your buck in terms of the investment you make.” Mr Scott said he expected more significant online investments to be made in its Bunnings, Kmart and Catch businesses.
Turning to trading, Mr Scott said “I would be very surprised, I think it will be unlikely to see the strong growth in sales that we have experienced in the last couple of months to continue. It would be great if they did, but I think realistically we would expect some moderation."




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Mar 30 2020, 06:56 PM
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iWesfsrmers s selling a $1.1 billion stake in supermarkets group Coles in a trade being handled by UBS and Goldman Sachs on Monday night, sources told Street Talk.

The brokers bought the stake at $15.39 a share after market on Monday and were seeking institutional buyers to take the stock.

The deal was at an 8.5 per cent discount to the last close and represented 69.4 million shares or 5.2 per cent of Coles' equity on issue.

- now holding under 10% ...., give up the director seat. Keeping 50% of Flybuys



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 
plastic
post Posted: Mar 19 2020, 01:32 PM
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Mines and factories should be included as well.

That none of it is happening lends ammunition to the argument that all is not what it would appear to be.

https://www.nzherald.co.nz/nz/news/article....jectid=12318220

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Gatherings of over 100 people banned to stop coronavirus spread




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What did Uncle Mel do to us?
 
 


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