Wesfarmers has lifted its net profit six per cent in the 2012/13 financial year.
The company has made a net profit of $2.26 billion during the year, up from $2.12 billion in the 12 months.
Coles posted earnings growth of 13.1 per cent, due to stronger sales activity.
Earnings from the Bunnings business rose 7.5 per cent from the same period in the previous year, but Target suffered a 44 per cent fall in earnings due to price deflation, excess stock and increased costs.
Resources earnings of $148 million were down 66 per cent on the previous corresponding period.
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Wesfarmers managing director Richard Goyder said five of the company’s nine divisions recorded strong earnings growth during the year.
He said the company’s retail division was expected to continue to grow strongly, despite ongoing weakness from Target.
“We expect continuing growth from the group’s retail portfolio. Coles, Kmart and Officeworks have plans to build on the strong foundations established during their respective turnarounds, and the outlook for Bunnings is positive,” he said.
“As Target executes its transformation, we expect earnings to progressively recover, but this improvement will take time.”
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Mr Goyder said Wesfarmers’ industrial divisions faced a difficult operating environment but its insurance division had recorded strong earnings growth.
The company declared a fully-franked final dividend of $1.03, taking the full year dividend to $1.80.
It also announced a capital return of 50 cents per share.
Finance Director Terry Bowen said the capital return had been made possible by the company’s continued strong cash flows and robust credit metrics.
“The capital return is being made to return surplus capital to shareholders and to ensure that Wesfarmers maintains an efficient capital structure.
“The company’s strong earnings growth, cash flow generation and balance sheet, together with well-established funding sources, mean we are able to undertake the capital return without adversely affecting our financial flexibility and growth objectives,” Bowen said.
“It further demonstrates Wesfarmers commitment to prudent capital management while actively managing its balance sheet to provide satisfactory returns to shareholders.”
The compnay said the share consolidation process will ensure that each shareholder’s proportionate interest in Wesfarmers remains unchanged post the capital return.
