The Wesfarmers Ltd (ASX: WES) share price jumped 3% on Wednesday after the retail company released its 2018 profit result to investors.
Wesfarmers, which owns Bunnings, Officeworks, Kmart, Coles (for now) and more, said it grew revenue 3% in its 2018 financial year. A final dividend of $1.20 would also be paid.
According to analysts’ forecasts collected by Bell Potter, Wesfarmers was expected to report a full-year profit of $2.78 billion. Given it produced a $2.9 billion result, it appears Wesfarmers beat expectations.
Coles Break-Up
A focal point for investors is the proposed Coles demerger. Wesfarmers bought Coles back in 2007 when it was on the brink.
Wesfarmers revived the supermarkets business and used its cash flow to fund growth in its other divisions, like Bunnings.
Following on from the announcement that it will demerge the Coles supermarkets division, Wesfarmers said it has made significant progress with its demerger plans and the split is likely to be completed in November 2018.
So What?
Wesfarmers has been on a sale and divestment bender having also recently announced the sales of the Curragh coal mine, Kmart Tyre & Auto and the shut-down of Bunnings UK.
Previously, analysts had opined that the demerger of Coles will give Wesfarmers up to $12 billion of access to new capital to pursue acquisitions.
Clearly, Australia’s largest retailer will be a completely different company by the end of its 2019 financial year.
