Wesfarmers: Result 2012

Investors are still in love with the Coles turnaround, but they’re ignoring looming problems in Wesfarmers’ resources-related divisions.

The positive market response to yesterday’s Wesfarmers result—the stock rose 4% on the day—was somewhat mystifying. It’s true that Coles and Kmart performed admirably, with divisional profit rising 16% and 31% respectively. There’s no doubt that Wesfarmers has done a great job turning around these retailers, and there’s probably a little more upside to come.

All up, revenues for Wesfarmers rose 6% to $58bn. Net profit rose 11% to $2.1bn, with earnings per share also rising 11% to 184 cents. A fully franked final dividend of 95 cents was declared (ex date 21 Aug).

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