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“INDUSTRIAL conglomerate Wesfarmers Ltd yesterday strongly defended its growth strategy…”. Do these words sound familiar? They could have been written last week, when Wesfarmers found its direction being questioned by the market despite a blockbuster half yearly. But they weren’t. They were reported in November 1998 after the company’s AGM and followed a prolonged “failure” to make an acquisition, the latest attempt being its $330 million bid for SGIO. The view was that Wesfarmers was always the bridesmaid, never the bride, when it came to acquisitions and, in Perth, its performance was often compared with the rival Futuris Corp Ltd. Oddly enough, if you look the 1997-98 annual report summary, two of its key growth strategies were opening new Bunnings stores and the development of the Bengalla coal project in NSW, its first venture in this area outside of Collie. Back then, Wesfarmers was a $3 billion company and its shares traded between $10 and $11 each. Despite market pressure, Wesfarmers management stuck to its knitting, grew Bunnings into retail force and expanded further into coal with the successful Curragh project in Queensland. Its shares are trading at around $35 each (having peaked at over $40) and its market capitalisation is more than $13 billion. History shows, there’s no value in rushing things.

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Wesfarmers (WES)

Share Price

Closing price for the last 90 trading days
Source: Morningstar

BN30 Index

Index = 100 as of 4 Jan 2016
Source: Morningstar

Total Shareholder Return as at 31/08/18

1 year TSR5 year TSR
131stSeven Group Holdings68%29%
256thWesfarmers27%10%
448thMonadelphous-2%2%
576thAutomotive Holdings Group-22%-5%
782ndRCR Tomlinson-62%-13%
737 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

13/09/18
$0 Other
14/06/18
$47k Bought
05/04/18
$5k Issued
Total value as at the date of the transaction
Source: Morningstar

Revenue

1st-Wesfarmers$67,152.0m
2nd-Automotive Holdings Group$6,472.6m
3rd-Seven Group Holdings$3,411.5m
4th↑RCR Tomlinson$2,004.1m
5th-Monadelphous$1,742.2m
237 listed industrial companies ranked by revenue.
Source: Morningstar

Remuneration from Wesfarmers

4thGuy Russo$4.038m
16thRob Scott$1.908m
169thMichael Chaney$569k
Ranked by total remuneration from all listed WA companies

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