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Wesfarmers chairman Michael Chaney has fired off a pre-emptive shot at critics after the conglomerate hailed $44.2 billion in revenue at its general meeting on Thursday, questioning why profit is seen as a “dirty word” today.
In his speech to be delivered to shareholders in Perth later today, Mr Chaney will defend Wesfarmers remaining strongly profitable through Australia’s cost-of-living crisis.
“For some external parties, profit seems to be a dirty word, but it is important to understand how profitable businesses are essential to our economy and future prosperity,” the Wesfarmers chair is scheduled to say.
“For one thing,” Mr Chaney is also expected to say in his Perth address, “companies have to be profitable in order to continue to operate – to do everything I just listed, like employing people, sourcing products and services from suppliers, providing customers what they need and supporting their communities.”
Wesfarmers had a 3.7% increase in annual profits (up to $2.56bn) after revenue lifted to $44.6bn even as most shoppers say they’re “feeling the pinch.”
Bunnings was again the biggest earner with $2.2bn EBITDA to June 30.
Kmart and Target were hit slightly as Aussies save money, though both were still up.
Mr Chaney is expected to tell shareholders this afternoon that “almost all” that profit generated from Bunnings, Officeworks, Kmart, Target, and more eventually went towards “supporting the economy and community in different ways.”
Overall, Wesfarmers is anticipating continued strength through what is very clearly a continuing cost-of-living crisis – and CEO Rob Scott heralded just that.
“While the outlook for the economy remains uncertain with ongoing challenges, Wesfarmers is well positioned with resilient businesses, a strong balance sheet, and various platforms for future growth,” Mr Scott says.
The group’s “low price position” in its retail businesses was a particular selling point.
Wesfarmers edged up to $67.69 before today’s meeting.
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