WES - Wesfarmers Limited

[Garpal Gumnut]

While being amazed that WES could ever be taken off topic by the "usual suspects" I will add an on topic post. WES is one of my picks in the 2024 Competition and so far is staying above $56 which now seems like support for this stock.

The conglomerate goes well. None of its board members have been caught in compromising positions in Dancing Schools for Young Ladies or other traps for boring old farts. Kmart and Bunnings seem suitably busy and Officeworks is over run by mothers buying up for insolent youngsters. WES other activities in mining, IT and pharma are potentially very, very, very lucrative.

Onwards and upwards, I say.

gg

 

[Value Hunter]

WES has been a cornerstone of my SMSF for many years and is a good solid stock. It is now quite the conglomerate. It is also one of my picks in the 2024 Competition.

Bunnings gives WES the cash. It has also managed over the years to accumulate good businesses and mining enterprises as well. These have not alone added value but now seem to be on the cusp of providing even more dividends to the group. This should come on board this year and next and it is already showing in the price. Originally a WA farming co-operative it had recently, it said due to covid, moved its board and management to Melbourne which seems to not have affected the company.

It does appear to have lived a charmed life having survived, it must be a decade or so ago now, an ill advised move in to the UK. Other than providing the board with an excuse to go shopping at Harrods it seemed not to have been driven by any understanding of the types of pot and fertiliser pommies like to munch upon. WES learnt a lesson.

Much of WES success has been attributed to the wisdom of the Chairman, Richard Goyder. Young Mr. Goyder however has had his under feathers and bits quite severely burnt recently from his board association with QAN and the Leprechaun at QAN of which he remains Chairman for a further year.

WES seems to have had a charmed life bar the UK venture but one does not like to see a dropped ball. Let us hope there is better succession planning in place at WES than was the case at QAN. It is the perfect conglomerate with wisely chosen investments, good governace and management, steady income streams and a steady rise in price. A rise from $57 today this year to $65 will see WES hit its all time highs and is achievable.


View attachment 168114

gg

Lets not also forget it was Richard Goyder who was chairman of Wesfarmers when it overpaid greatly to acquire Coles right before the GFC happened.

 

[Garpal Gumnut]

Lets not also forget it was Richard Goyder who was chairman of Wesfarmers when it overpaid greatly to acquire Coles right before the GFC happened.

Indeed. Goyder is being watched by me, the AFR, every Family Office, and Fund Managers throughout Australia daily.

I'm quite sure he also watches ASF daily "Gooday Richard".

One good thing that has come out of the Qantas debacle ( which is not over btw.) is that WES will be forced to look at generational change more quickly. Stickiness is one of their risks.

Goyder is very well connected in WA. He has had some very good wins on the board at WES, and his CV shows he has used his B.Comm well and fights with passion and mongrel.

gg

 

[Sean K]

Ah bugga life is a bit ordinary at the moment.

Should be happy with how this has started though.

Would be happy to have bought in June 23 too. Although, not August 21. Heading back there. They don't seem to be affected at all by the lithium price fall. Maybe it's just a blip for them.

 

[farmerge]

WES Wesfarmers former iconic WA farming co-op. Has to be included in any fund I feel. Has held its starting SP in January and will probably finish the month in strong positive territory. (I hope) Definitely a top shelf company that returns a decent dividend to shareholders.

 

[InsvestoBoy]

Anyone got access to The West Australian?

Wesfarmers’ Mt Holland start-up in focus as tumult grows

The group is keeping mum on plans to sell concentrate from the $2.6 billion project into a weak market for the battery metal.

thewest.com.au

The conglomerate is refusing to be drawn on whether the price slump has changed its plans to sell lithium-rich spodumene from the concentrator at Mt Holland in the Goldfields to generate early cashflow ahead of its refinery opening in Kwinana next year.

everything else is beyond the paywall

 

[Garpal Gumnut]

* My post for Feb in the 2024 comp, @debtfree. Thank you comrade.

Wesfarmers is the conglomerate that keeps giving. @farmerge and the Westies have the inside information on the farmers tight control over Richard Goyder and his executives. The latter moved the hq of WES to Melbourne.

Despite this, the company seems to be sticking to its onions and thrives. a pick of mine in the 2024 competition which may outdo many spec shares this year. I had originally hoped for an $80 SP by years end. However $100 does not seem unreachable at this rate.

We are in a W3 of a five wave EW from June 2023. W1 is June-Sept 23 , W2 is Sept to Nov 23. W3 is the monster large wave we are in from Nov to now which is breaking down nicely in to its own smaller predictable waves.

WES is over represented in my SMSF. I may buy for the grandchildren on a pullback in this W3.

gg

 

[Dona Ferentes]

results

.
(...ignoring the feel good stuff)
.
Outlook
Wesfarmers remains focused on long-term value creation and continues to invest to strengthen its existing businesses and develop platforms for growth. Low unemployment and strong population growth provide support to overall economic conditions in Australia, driving demand and contributing to the need for additional housing stock. While Australian inflation has moderated over the last 12 months, current inflation and interest rates remain elevated, and consumers continue to focus on value and manage spending carefully.

The strong value credentials and expanding offer of everyday products across the Group’s retail businesses make them well positioned in the current environment and for any improvements in consumer sentiment. For the first five weeks of the second half of the 2024 financial year, Kmart Group has continued to deliver strong sales growth. Sales growth in Bunnings remained broadly in line with results for the first half. Officeworks’ sales for the first five weeks were in line with the prior corresponding period.

Domestic cost pressures in Australia and New Zealand are expected to remain elevated, driven by inflation, labour market constraints and wage cost increases, and energy and supply chain costs. The Group is monitoring ongoing pressures in international supply chains and key shipping routes, and has implemented additional contingencies where possible to mitigate the risk of interruptions.

Wesfarmers’ larger businesses are benefitting from investments made to digitise their operations and develop their sourcing capabilities. Together with benefits from proactive investments in productivity and efficiency over recent years, the Group remains focused on disciplined cost management.

The high quality of the Mt Holland deposit is expected to enable the integrated Covalent lithium hydroxide project to operate with an attractive relative cost structure and support satisfactory long-term shareholder returns. Following the successful commissioning of the concentrator at Mt Holland, operations are now in ramp up and WesCEF’s share of spodumene concentrate production in the 2024 financial year is expected to be approximately 50,000 tonnes. Spodumene concentrate sales volume for 2024 will be dependent on commercial factors including the prevailing spot price, but at current spodumene prices sales will not contribute positive earnings during the 2024 financial year due to the higher cost of production while volumes ramp up towards full capacity.

The performance of the Group’s industrial businesses remains subject to international commodity prices, foreign exchange rates, competitive factors and seasonal outcomes.

Wesfarmers will continue to invest in its existing operations and in the development of platforms for long-term growth and shareholder value creation. The Group expects net capital expenditure of between $1,000 million and $1,200 million for the 2024 financial year, subject to net property investment and the timing of project expenditures.

 

[Dona Ferentes]

virtue signalling has its rewards.
.
up 5 per cent to $62 on very low single digit numbers. cash generation seems fine.

I don't know why I bothered to try and trade WES. Will hold what I have had in PF for Tim is.

 

[Dona Ferentes]

The making of Kmart has been under way for years, and its productivity gains are now starting to shine. The digitisation of its supply chain is resulting in improving availability of products for shoppers

Target is now part of KMart and, together, delivered record earnings of $601 million for the first half of 2024, an increase of 26.5 per cent, as customers continued to snap up beauty and youth apparel. Margins were up a staggering 10 per cent. Sales gained 4.8 per cent to $$6 billion, with comparable sales growth of 7.5 per cent for the half.

MD Ian Bailey said higher-margin apparel has been a strong performer, but he also assured investors that the strong results are not one-off in nature.

“If you have a really strong half it means you’ve got less clearance. But none of those things I put in a category of one-off kicks, which we should anticipate in the future. Our ambition is to continue to operate at the same level,” he said.

Back in 2020, Kmart’s home brand Anko barely got a mention in the accounts. Now Anko makes up 85 per cent of sales in Kmart in its 300 plus stores, and it also represents about 25 per cent of the products in Target. Last year Anko launched in Canada with the Hudson Bay Company via a store-in-store concept with discount chain Zellers.

Anko Global, a product development company, has offices in China, India UK, France and Australia. The upshot is the potential for the Anko brand is enormous.

 

[qldfrog]

The making of Kmart has been under way for years, and its productivity gains are now starting to shine. The digitisation of its supply chain is resulting in improving availability of products for shoppers

Target is now part of KMart and, together, delivered record earnings of $601 million for the first half of 2024, an increase of 26.5 per cent, as customers continued to snap up beauty and youth apparel. Margins were up a staggering 10 per cent. Sales gained 4.8 per cent to $$6 billion, with comparable sales growth of 7.5 per cent for the half.

MD Ian Bailey said higher-margin apparel has been a strong performer, but he also assured investors that the strong results are not one-off in nature.

“If you have a really strong half it means you’ve got less clearance. But none of those things I put in a category of one-off kicks, which we should anticipate in the future. Our ambition is to continue to operate at the same level,” he said.

Back in 2020, Kmart’s home brand Anko barely got a mention in the accounts. Now Anko makes up 85 per cent of sales in Kmart in its 300 plus stores, and it also represents about 25 per cent of the products in Target. Last year Anko launched in Canada with the Hudson Bay Company via a store-in-store concept with discount chain Zellers.

Anko Global, a product development company, has offices in China, India UK, France and Australia. The upshot is the potential for the Anko brand is enormous.

It is , anko is cheap, power of Chinese manufacturing.
Yet even after doubling Chinese price is a bargain for Australian customerd
Since 2020, China has moved its lending from building housing and infrastructure to manufacturing(5% annual growth of such loan), this explains why our IO is still high but also means we will be under a renewed wave of Chinese made good, cheaper and better (automation) and anko will benefit, as will Bunnings.
WES is playing well here, as do the chineses.i own WES..not enough as it took a while to get them and I add to rise my but orders, but good anyway

 

[Dona Ferentes]

Owning WES shares is a good way to be aware of their story. Not Coles now, but its easy to visit and purchase at Bunnings and Kmart, and see how they organised they are.

I was told about Anko by a (former) Target executive. Their $49 vacuum cleaner has plenty of power; no wonder Godfrey's went bust.

 

[Sean K]

What the hell happened last week @farmerge @Garpal Gumnut @Dona Ferentes ?

Results weren't that good were they and the lithium business must be tanking.

 

[Dona Ferentes]

What the hell happened last week @farmerge @Garpal Gumnut @Dona Ferentes ?

Results weren't that good were they and the lithium business must be tanking.

Kmart

 

[Garpal Gumnut]

What the hell happened last week @farmerge @Garpal Gumnut @Dona Ferentes ?

Results weren't that good were they and the lithium business must be tanking.

View attachment 171146

Thanks for the chart @Sean K .

I would agree with @Dona Ferentes that Anko is one of the main reasons why Kmart and WES are flying atm. Cheap money also has much to do with it. I generally buy for Australian use clothing at Kmart. It is hard to go past it for value and price. Customer service and returns are good, with an amazing setup to encourage spenders from the entrance to the chekout. Apart from shoes, one cannot see any other outfitters beating them for quality, and even the shoes from Anko are rapidly approaching that available at Myer for the discerning.( My shoes only come from John Robb btw. )

There is still much cheap money post Covid sloshing about in the system with retail, inflation and wages chasing the unbacked fiat as if there were no tomorrow. Much of the retail goes to Bunnings and Kmart. Anko is also going international as a brand. WES have learnt from the Bunnings UK fiasco. It is easier to sell a brand rather than a BBQ setting to the Poms.

WES is one of my picks in the Y24 Comp and I'm hoping for a $100 sp to finish.

gg

 

[Dona Ferentes]

.... and don't forget continuing cheap imports from China, gg

WES is ex dividend of $0.91 today.

 

[farmerge]

Wesfarmers Ltd my cream on top of the cake in the Yearly comp. Just powering up to a close of just under $65.00and providing a pretty decent dividend for the 6 months.

 

[Dona Ferentes]

Wesfarmers Ltd my cream on top of the cake in the Yearly comp. Just powering up to a close of just under $65.00 and providing a pretty decent dividend

definitely WES pulled ahead when the 1H results came out, and has continued pull ahead of the index

. Most of the gains have been in the past 6 months ... onward and upward, we all say

 

[divs4ever]

Wesfarmers (ASX: WES) Take Profits, HOLD, or BUY​

Wesfarmers (ASX: WES) Take Profits, HOLD, or BUY

Wesfarmers has seen solid financial results and a share price flirting with all-time highs, with analysts suggesting investors may want to take some profits.

thebull.com.au

i hold WES

i am tempted to retain them until the fate of Office Works becomes clearer

way too expensive currently for me to add to the holding ( except via the DRP )

 

[divs4ever]

PS my last top up was in 2018 shortly after the COL spin-off ( @ $31.25 )