Wesfarmers (WES) H2 2024 earnings summary

Executive summary

• Net profit after tax rose 3.7% to $2,557 million, with revenue up 1.5% to $44,189 million and operating cash flows up 9.9% to $4,594 million, reflecting strong operational execution and retail performance, especially from Kmart Group.

• All major retail divisions grew sales and earnings, with Kmart Group delivering standout earnings growth of 24.6%.

• A fully franked final dividend of 107 cents per share was declared, bringing the total for the year to 198 cents, up 3.7%.

• The group maintained a focus on productivity, technology investment, and omnichannel retail, supporting customer value and operational efficiency.

• Progress made on key growth projects, including health and the Covalent lithium project, and continued focus on climate resilience and community engagement.

Financial highlights

• Revenue: $44.2b (+1.5% YoY); NPAT: $2.6b (+3.7% YoY); EBIT: $3.99b (+3.3% YoY); EPS: 225.7c (+3.6% YoY).

• Operating cash flows: $4.6b (+9.9% YoY); Free cash flows: $3.2b (-11.1% YoY); Net capital expenditure: $1.04b (-11.7% YoY).

• Net financial debt increased to $4.3b, with a debt/EBITDA ratio of 1.8x and return on equity at 31.3%.

• Full-year fully-franked dividend: 198 cents per share (+3.7% YoY).

• Cash realisation ratio at 105% and strong investment-grade credit ratings with $1.9b in unused bank facilities.

Outlook and guidance

• Inflation and interest rates remain elevated, with cost pressures expected to persist into FY25.

• Early FY25 trading: Kmart Group and Officeworks sales growth in line or ahead of 2H24, Bunnings positive but moderating.

• Covalent Lithium refinery expected to deliver first product mid-2025, with sales in FY26 after ramp-up and qualification.

• Net capital expenditure guidance for FY25 is $1.1–1.3 billion.

• Focus remains on long-term value creation, investing in existing businesses and growth platforms.