Page 40 - HW March 2022

global eyes
Wesfarmers’ Covid-hit Q1 turns positive in Q2
THE EFFECTS OF Covid bit hard into Wesfarmers Q1, but a stronger Q2 softened some of the impacts.
For the half-year to end December 2021 (H1 FY2022), in mid-February Wesfarmers reported flat overall revenues (in fact negative 0.1%) with a negative 12.5% EBIT (excluding significant items), and NPAT (negative 14.2%).
Wesfarmers Managing Director Rob Scott called it a “solid financial result” in “a disruptive environment” which “highlights the strength of the Wesfarmers portfolio, and the capacity of divisional teams to adjust rapidly to meet customer demand.”
He continued: “The first half of
the 2022 financial year was the most disrupted period for our businesses since the onset of COVID-19, with extended government-mandated store closures and trading restrictions in Australia and New Zealand.”
Indeed, the Kmart Group continued to suffer with negatives to both its top and bottom lines, while Officeworks saw a top line gain but also a double-digit decline
to its EBIT, and Chemicals, Energy & Fertilisers bucked the trend with big gains in sales and earnings.
Revenue for Bunnings ANZ was reasonably positive, at AU$9.2b for the half (+1.7%), albeit with a negative AU$1.2b EBIT excluding significant items (down
1.3% on H1 FY2021 but +34.2% on H1 FY2020), having “absorbed additional COVID related and supply chain costs and continued to invest in price.”
As with Fletcher Building’s first-half numbers (see page 8 in this issue), the disruptions of Q1 bit into Bunnings’ Australasian business for the half, with store-on-store sales +1.5%, despite a strong Q2, of which the company says: “While lockdowns in Australia and New Zealand impacted quarter one trading
and sales, pleasingly, Bunnings was able
to recover sales momentum in the second quarter, culminating in a strong Christmas, supported by a strong stock position.”
Rob Scott said of the H1 FY2022 result: “Bunnings delivered pleasing
sales and earnings results in the context of the significant disruptions to trading conditions during the half and the very strong growth in the prior corresponding period.”
Commenting on the performance, Bunnings Managing Director Mike Schneider said: “Despite having to close stores to retail customers in NSW, ACT, Victoria, and New Zealand in the first quarter, we recovered sales momentum in the second quarter.
“In the midst of retail sector cost and stock pressures, we worked hard to maintain our everyday low prices and
strong product availability for customers through active supply chain management. “We refreshed a number of our product
categories, with our updated garden care and storage ranges well received and our new easier-to-shop layout for power tools proving popular.
“We also boosted service by equipping our team with push-to-talk communications, allowing them to open check-outs faster when traffic builds and locate expert team quickly to assist customers.”
Also noteworthy were the improvements seen in the Industrial & Safety division’s H1 numbers with revenues of AU$944m (+5.1%) and earnings of AU$41m (+10.8%).
“The solid performance of Industrial and Safety was supported by higher sales and increased operating efficiencies at Blackwoods, as well as continued growth in demand from Coregas’ industrial and healthcare customers,” said Rob Scott.
In terms of an overall outlook for
the second half of FY2022, Rob Scott called January’s retail trading conditions “subdued” thanks to rising cases of the COVID-19 Omicron variant impacting on consumers and team members but added that trading momentum had “improved in recent weeks.”
www.wesfarmers.com.au
38 NZHJ | MARCH 2022
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