Page 34 - HW September 2020

global eyes
Strong year for Bunnings ANZ but outlook is “highly uncertain”
WESFARMERS RELEASED ITS FY2020 year-end numbers last month, revealing amongst other things that Bunnings ANZ (BANZ) continues to be a mainstay of the corporate’s stable.
Along with O ceworks, Bunnings’ Australasian earnings were “particularly strong and demonstrated the ability of these businesses to rapidly adapt to the changing needs of their customers,” said Wesfarmers MD, Rob Scott.
anks to the COVID-19 environment, as you’d expect, in the second half, the Group’s retail businesses “experienced signi cant volatility in sales due to changes in foot tra c as a result of government restrictions and physical distancing requirements.”
e ip side was “customers spending more time working, learning and relaxing at home led to very strong demand in some product categories, particularly in Bunnings and O ceworks.”
e Bunnings ANZ year-end numbers were as follows:
• Revenue AU$14.9 billion (+13.9% on
the previous FY)
• EBIT AU$1.8 billion (+13.9%)
• Same store sales (+14.7% but excludes
NZ stores impacted by temporary closure)
In terms of major costs during the year,
some AU$20 million went towards cleaning, security and PPE while extraordinary second half costs of some AU$70 million were the result of trading restrictions in New Zealand, the closure of seven New Zealand stores and the accelerated rollout of the online o er, including writing o legacy e-commerce platform assets.
ere are no other mentions of the Bunnings New Zealand business speci cally at this point.
Coming into the new FY, although the strong retail sales growth experienced in the second half of the 2020 nancial year continued through July, the Victorian lockdown has impacted particularly Kmart and Target, although Bunnings and O ceworks have “continued to deliver pleasing growth at a national level through August.”
And, as you would expect, online sales “increased signi cantly” through July and August across all retail businesses.
e outlook for the BANZ business, however, “remains highly uncertain”, with Bunnings’ performance in FY2021
“expected to moderate following the extraordinary growth in the second half”.
On top of this, “weaker economic conditions are expected in Australia and New Zealand with the gradual removal of nancial support measures from the government, banks and landlords
which is likely to impact housing and renovation activity.”
In terms of a group outlook, the following is Wesfarmers’ caveat looking further out:
“ e continued impact of COVID-
19 on customer demand, operations and the broader economy present signi cant uncertainty for the Group’s businesses.
“While consumers spending more time at home is likely to support higher demand in some of the Group’s businesses, retail sales will be impacted by any further trading restrictions and the gradual removal of Government stimulus measures, including early superannuation access, should unemployment remain elevated.
“Retail sales may also be impacted by some customer purchases in the 2020 nancial year being brought forward from the 2021 nancial year.”
www.wesfarmers.com.au
32 NZHJ | SEPTEMBER 2020
MORE AT www.hardwarejournal.co.nz