Investment Matters

What matters this week: profit results

You will know that company profit reporting 'season' is underway.  As with last week, elsewhere in Investment Matters we look at the results for companies in which First Samuel has invested for you.

Here, I give some comments on other interesting companies' announcements this week:

Wesfarmers, a retail conglomerate that owns Coles, Bunnings and various other retailing operations, as well as industrial business and coal mines, delivered its worst result in 14 years, with an 83% profit slump to $407m.  But in fairness, that figure included a lot of one-off factors, including asset write-offs.  So, excluding impairments (as write-offs are know as), net profit declined 3.6% to $2.4 billion.

Qantas broke its seven-year dividend drought in announcing a record pre-tax profit of $1.5 billion.  The airline also gave staff members, who had their salaries frozen for 12 months, a $3,000 bonus.

Woolworths, owner of supermarkets, as well as hotels, Big W and the ill-fated Masters, announced (a) its first loss ($1.2 billion) as a listed company; (b) a cut in its dividend of 54%; and (c) that it was closing its Masters hardware chain on 11-Dec; selling the underlying properties and selling inventory of about $500m.  Woolworths has lost over $3 billion on the hardware venture.

Elsewhere, the ANZ-Roy Morgan consumer confidence index rose to its highest level since Nov-13.