Outgoing Wesfarmers Managing Director Richard Goyder has overseen yet another strong result from the Australian business giant.
The retail, hardware and industrial juggernaut, which employs more than 220,000 people and has a shareholder base of more than 500,000, reported a 22.1 per cent increase in net profit after tax to $2.87 billion.
Earnings per share increased 21.6 per cent to a record $2.55 per share.
Wesfarmers’ retail divisions posted strong results with continued growth in Bunnings, Kmart and Officeworks.
Supermarket giant Coles’ earnings decreased by 13.5 per cent, but Goyder expected its customer-led strategy would pay off in the long-run.
It was pleasing to report a record level of earnings and operating cash flows, and a strong increase in return on equity for Wesfarmers for the 2017 financial year, he says.
“The results achieved during the year demonstrated the strength of the Group’s conglomerate structure, as well as our focus on cash generation and capital efficiency,” Goyder says.
“A strong recovery in the performance of the industrials division reflected higher earnings across all three business units, and was driven in particular by higher coal prices and increased coal production in the resources business.
“Retail earnings were also above the prior year, supported by continued strong momentum in Bunnings Australia and New Zealand, Kmart and Officeworks.
“The Group’s capital management was again a highlight, with operating cash flows increasing $861 million to $4,226 million and the cash realisation ratio increasing to 102.1 per cent.
“Higher operating cash flows, lower net capital expenditure and the proceeds from the sale of Coles’ credit card receivables resulted in very strong free cash flows of $4,173 million and further strengthening of the Group’s balance sheet.”
The outgoing managing director will be speaking at a CCI Lighthouse Leadership series event on September 12. Book your tickets to hear from Richard Goyder here.