Wesfarmers Utilise Growth Opportunities as Shares Rise

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Wesfarmers Limited [ASX:WES] has had a very eventful first half of the year.

Its business structure has been seen many changes, the intention being to demerge from Coles.

However, in the wake of its business decisions it has grown by 17.55% in the span of a year.

Wesfarmers are continuing to maximise new opportunities which are presented in their path of business operations.

Digital opportunities prompt further growth strategy

By maximising digital opportunities, Wesfarmers can expand its services while utilising an online platform.

Wesfarmers is also focused on a more deeper and wider engagement on its commercialised front.

In 2018 it has gained the largest online audience in Australian retail.

Australian based website services have experienced a 20% growth throughout a year on year basis.

This has contributed to Wesfarmers maintaining a loyal customer base while holding its long-standing supplier relationships to a high degree.

Long term growth and earnings have been stable throughout their 2017 financial year.

By improving its working capital efficiently, it’s able to reposition its growth towards new opportunities.

Expenses are also inline, as costs are decreasing with the financial years, interest expense is at a healthy value.

Wesfarmers reported that managing director Rob Scott stated:

‘Strong production volumes and higher coal prices in the Resources business contributed to a significant increase in the Industrials division’s earnings, higher earnings across a majority of the Group’s businesses were offset by losses in BUKI and lower Coles earnings following planned investments in price and service.’

By demerging with Coles, Wesfarmers can steer themselves out of debt.

A vast amount of strategic flexibility, and strong access capital, will be available to Wesfarmers as they follow through with the demerger.

Shareholder distributors are able to deliver returns across a longer term, as Wesfarmers balance shareholder distributions in an efficient manner.

Today its shares grew by 2.07%


Ryan Clarkson-Ledward,
For, Money Morning

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