Wesfarmers is handing more than $1 billion of the cash it raised by demerging Coles and selling other assets back to shareholders in the form of a special dividend.
Wesfarmers' first-half profit soared to $4.5 billion from $212 million in the prior corresponding period due to $3 billion in one-off items following the supermarket demerger and the sale of Bengalla, Kmart Tyre and Auto Service, and Quadrant Energy.
The Perth-based conglomerate cut its interim dividend to $1.00 from $1.03 in the prior corresponding period, but declared a $1.00 per share special dividend.
Wesfarmers shares gained strongly on the news of the $1.134 billion windfall, rising 6.2 per cent to $34.74 by 1217 AEDT on Thursday.
"This capital management activity distributes to shareholders the profits realised on asset disposals and takes into account Wesfarmers' available franking credits, strong balance sheet, robust credit metrics and cash flow generation - while preserving balance sheet capacity to take advantage of value-accretive growth opportunities, if and when they arise," managing director Rob Scott said.
Wesfarmers demerged and floated Coles on the ASX in November, retaining a 15 per cent stake in the supermarket giant while focusing on higher growth less capital intensive ventures.
The conglomerate still owns Bunnings, Target, Kmart, Officeworks and an industrials division.
Total revenue from continuing operations for the six months to December 31 rose 4.2 per cent, with Bunnings and Officeworks the standout performers.
But pre-tax earnings from its department store unit - which operates both Target and Kmart - fell 3.8 per cent.
Kmart's comparable sales fell 0.6 per cent following weaker apparel sales and an exit from DVDs, while comparable sales at Target edged up 0.5 per cent helped by an improvement in womenswear.
WESFARMERS' FIRST HALF
* Net profit $4.538b v $212m in pcp
* Revenue from continuing operations up 4.2pct to $14.39b
* Net profit from discontinued operations $3.458b v $466m loss in pcp
* Fully franked interim dividend down 3.0 cents to $1.00
* Fully franked special interim dividend $1.00
Share
