Coles owner Wesfarmers has lifted its first half profit more than 11 per cent following another strong performance from the supermarkets giant, off the back of its “down, down” marketing campaign.
Wesfarmers made a net profit of $1.429 billion for the six months to December 31, up from $1.285 billion a year ago.
Coles lifted its earnings nearly 11 per cent to $836 million during the half thanks to growth in customer numbers and basket sizes.
Meanwhile, earnings from Wesfarmers’ home improvement business Bunnings rose 8.5 per cent to $562 million following solid sales growth.
But general department store business Target saw its earnings cut in half to $70 million as it struggled to clear aged and excess winter stock.
Earnings from Kmart increased almost six per cent to $260 million, while
Officeworks lifted its earnings 10.5 per cent to $42 million.
Earnings from Kmart increased almost six per cent to $260 million, while Officeworks lifted its earnings 10.5 per cent to $42 million.
Wesfarmers’ resources division suffered a 37 per cent slide in earnings to $59 million due to lower coal export prices, while earnings from the company’s insurance division were down nearly five per cent to $99 million.
Managing director Richard Goyder said the group result was pleasing, given the weakness in Target and the resources division.
“The strong performance of our retail businesses, excluding Target, underpinned the increased earnings achieved by the group,” Mr Goyder said.
“Good growth in Coles earnings highlighted its successful transition to the next phase of growth, building on the solid foundation established during its initial turnaround plan.”
Wesfarmers said it expected the retail businesses to continue to perform strongly during the second half and said it was working to turnaround the performance of Target.
The company announced a fully franked interim dividend of 85 cents per share, up from 77 cents per share.
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