Comment

“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.