Wesfarmers (WES) +0.63%: first half result was a beat to the market with profit up 23% at $1.4b ahead of consensus at $1.2b. The dividend rose with the profit, climbing to 88c. No doubt the first half was assisted by a positive retail market with each of Wesfarmer’s main brands caching a sales tailwind. Bunnings LFL was up 27.7%, Kmart and Target were up 9.1% and 13% respectively while Officeworks 23.4% higher. The company did note that LFL growth had started to revert towards long term averages into the end of the calendar year and is “expected to moderate from March” as the comp cycles to COVID lockdowns. WES also have a Chemicals, Energy and Fertilizers (CEF) business which makes up ~15% of the business, which saw EBIT fall 8% largely on commodity prices. They did announce approval on the Mt Holland Lithium projected expected to be up and running for FY22. We like WES, the result is a good one as expected. It’s well run and with plenty of balance sheet fire power.
We remain bullish WES
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