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WES - Wesfarmers Limited

Dona Ferentes

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Yes the GFC was the biggest over reaction con job I've ever seen, WES was a magic pickup then, so was CSL $27 and MQG $15. :xyxthumbs
Nothing like a crisis, to tighten sphincters and release value. 😂

I don't know about con job but it was good to see what fell out when the tree was shaken. Fresh Fruit for Rotting Vegetables.
 

Dona Ferentes

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  • For FY 2022 its net profit slipped 1.2 per cent to $2.35 billion
  • Sales up 8.5 per cent to $36.84 billion.
  • Net debt stood at $4.3 billion.
  • NPAT growth of 13.1 per cent excluding significant items
  • Dividend of $1.00 ff; full-year dividends up 1.1 per cent to $1.80 per share,
The Group’s financial results for the year reflect the material impact of COVID-19 on trading conditions during the first half, which included weeks where almost half of the Group’s retail stores were either subject to trading restrictions or closed,” said Rob Scott the chief executive.

Flagship Bunnings’ revenue was up 5.2 per cent to $17.75 billion over the year with earnings up 0.9 per cent to $2.2 billion.
Kmart Group sales fell by 3.5 per cent to $9.635 billion for 2022 FY. Earnings of $418 million were 39.7 per cent lower. COVID-related disruptions saw almost 25 per cent of store trading lost, in the first half.
Sales at Officeworks were in line with the prior year: revenue increased 4.6 per cent for the year to $3,169 million, while earnings of $181 million were 14.6 per cent lower
Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) posted record earnings reflecting elevated global commodity prices.


The group didn’t provide any specific financial guidance for FY 2023.
 
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Nothing recent. I do remember when they got Mt Holland from Kidman Resources a few years ago but they don't seem to get a mention with the popular producers or those close to producing.
Usual updates on those with potential

I have a feeling that there is a lot of potential there, vertical integration is a strategy currently only being approached by China. WES is the only non Chinese company I know of working towards it.
 

Dona Ferentes

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These things are known:
Heightened tensions between China and the US over the past few years have prompted the US to encourage its manufacturers to reduce their reliance on China for a range of critical minerals.

This is playing into the hands of Wesfarmers as it proceeds with its $1.7 billion investment in the Mt Holland lithium project, which is a 50 per cent joint venture with Chilean-based lithium producer, Sociedad Quimica y Minera (SQM).

Mt Holland, which is believed to be the largest advanced manufacturing project underway in Australia, will provide the world’s car manufacturers with an alternative to Chinese made lithium hydroxide (China refines 60 per cent of the world’s lithium ore).

Wesfarmers spent $304 million of its promised $950 million capital investment in the Mt Holland project in 2022 and CEO Rob Scott says it will be producing lithium hydroxide by the end of 2024. The project includes a lithium mine, a concentrator and a refinery at Kwinana.

He says the chemical processing plant will take six to 12 months to reach its production capacity of 50,000 tonnes a year. At current prices, that output would be worth $US3.75 billion in revenue.

But most analysts believe the lithium hydroxide price will fall from its current level of $US70,000 a tonne to a much lower level by 2024. Macquarie forecasts the price will be $US33,750 a tonne in 2024 and Barrenjoey says it will be $US31,000 a tonne.

..............
And this comment is new:

Scott says Wesfarmers is seeing strong interest in its proposed supply of lithium hydroxide from customers trying to cut their reliance on Chinese supply.

Most of the customers we are speaking to are ex-China,” he says. “A lot of the European, American and North Asian car manufacturers and battery manufacturers have a strong preference for sourcing lithium hydroxide outside of China.
So that that’s helpful. The other point to mention is that lithium hydroxide is more of a speciality chemical than a commodity, and having a partner like SQM, that is one of the world leaders in lithium hydroxide production, also gives customers a lot of trust in the product that we will ultimately supply."
 

Dona Ferentes

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and more
Mt Holland lithium project is progressing well, chief executive Rob Scott said during the briefing.
  • Development of the project’s village and aerodrome are complete
  • Construction of the concentrator and refinery is advancing.

Wesfarmers’ lithium team has also progressed discussions with key customers, that “continue to be supported by very strong market fundamentals”, Scott said.

The company’s net capex was largely driven by $304 million of project capex and $34 million of capitalised interest in relation to the Mt Holland lithium project, chief financial officer Anthony Gianotti said
 

Dona Ferentes

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The first in-depth interview by Emily Amos, some 5 months into the appointment as head of the new Health and Wellbeing division at WES.
I feel like both my health and my retail background has set me up well because I think you have to be able to set up a vision, but you really do need to learn how businesses operate to understand how work flows through the organisation so that you can actually deliver on the transformation agenda,” she tells The Australian Financial Review.

Amos is looking to prioritise digital and data investment. This may include developing new and innovative products and services within the business including digital health initiatives. Other targets could include rivals such as Sigma Healthcare, and eventually private hospitals and beauty businesses.

API’s Sister Club, which boasts over 7.5 million members and is the fourth-largest loyalty program in Australia in terms of market penetration, represents the biggest opportunity. Amos plans to use this data to jumpstart sales, help expand ranges, and improve pricing and promotions.

Over the past financial year, Priceline was supported by strong sales in all major health categories due to the large numbers of cold, flu and COVID-19 cases that came with people returning to more normal patterns of working, travelling and socialising as lockdowns ended.

This was partially offset by weakness in beauty, as people cocooned at home amid the pandemic. Amos says beauty is pivotal to Priceline – which plays in the affordably priced market where many teenagers experiment with make-up.


....
Priceline is being savaged by Chemist Warehouse. Although there's money in cosmetics for everyone. A friend's daughter went to have a bit of 'work', spending her saved $200, nip here, hold a line there, and was asked if she was grinding her teeth at night? $800 later. Ah, botox. Ah vanity. Ah, fries with that.
 
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