By Claire Reilly
SYDNEY, NSW: Wesfarmers – the parent company of retail giants Coles, Kmart, Target, Officeworks and Bunnings – announced its full year results for the 2010-2011 financial year today, with the company reporting an operating revenue of $54.9 billion, up 5.9 per cent on 2010, and a net profit after tax of $1,922 million, up a staggering 22.8 per cent.
Across the board, the stable of brands owned by Wesfarmers saw a drop in finance costs of 19.6 per cent, down to $526 million. Clearly, with profits up 22 per cent but revenues only up 5 per cent, the company’s cost of business has gone down down.
Wesfarmers' office supply chain Officeworks came out on top in FY2011. In its results report, Wesfarmers said Officeworks had posted “pleasing sales growth” with “retail store sales up 5.2 per cent, strong transaction growth maintained and B2B [business to business] growing with strategies gaining traction”.
Officeworks opened 10 new stores and carried out 6 full store upgrades, with 40 per cent of stores reported as trading under the company’s new format. The report added that the company was making good progress with “website enhancements, range expansion [and] service investment”.
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While predominantly a hardware retailer, Bunnings has expanded its appliance offering in recent years, with products in the cooling, heating, barbecues and cooking appliance categories.
The Bunnings chain reported a 5.7 per cent increase in trading revenue for the 2011 financial year, reaching a total of $6,780 million.
During the course of the year, the home improvement retailer opened 27 new trading locations, including 11 new warehouse stores, 8 smaller format stores and 8 trade centres, making a total capital investment of $595 million.
The Wesfarmers results report stated that Bunnings would “maintain a strategic focus on five growth drivers” as it progressed into the future.
These included “service; category expansion and customer experience; network expansion and reinvestment; commercial market presence; and investing productivity gains in lower prices to drive value.”
In terms of a broader outlook, Wesfarmers stated that it was positively placed to continue to hold a stable position in the retail market.
“Given declines in consumer confidence, [Wesfarmers'] retail brands are well-placed due to staples and value-based positioning,” the report read.