By Keri Algar
SYDNEY, NSW: Wesfarmers, Bunnings’ parent company, has reported a 33 per cent profit rise for the first half of the financial year largely thanks to the flourishing Coles business.
Good merchandising and a strong focus on cost management are factors underpinning growth in the Bunnings business, according to a statement released today on the Australian Securities Exchange.
The home improvement sector for Wesfarmers reported an 8.3 per cent rise in earnings before interest and tax to $457 million, up from $422 million from the corresponding period last year.
A total store sales growth of 4.1 per cent was reported, which the company said was pleasing given the continued deflationary impacts of ‘value focus’ work that is underway at present, as well as bad weather.
Bunnings said its outlook remained confident and that the business is well positioned for continued sales growth. This will be delivered through the development of in-store service, category expansion, network expansion and further reducing the cost of doing business.
Wesfarmers reported a net profit after tax of $1,173 million for the six months to 31 December 2010. Earnings before interest and tax for the Coles business was up 18.3 per cent to $575 million.