Wesfarmers Limited’s Shares Tumble After Appointing New Managing Director Of Officeworks

wesfarmers

On 11 October 2018, Wesfarmers Limited (ASX: WES) announced that the board has appointed Ms. Sarah Hunter as Managing Director of Officeworks in place of Mr. Mark Ward who is retiring as Managing Director and become as a Senior Advisor in the company. The role of Ms. Sarah Hunter’s will be effective from 1 January 2019. After the announcement of this news, the share price of the company decreased by 2.697 percent as on 11 October 2018.

Ms. Sarah Hunter is currently the Demerger Program Director of Coles. Ms. Sarah Hunter is responsible for overseeing Coles’ implementation of the proposed demerger from Wesfarmers. In the past eight years at Coles, Ms. Sarah Hunter has held several leadership position spanning operations, finance and commercial role. Before Joining Coles, she worked in the UK for more than 10 years, holding a number of senior commercial positions in banking and airports which includes working as Strategy and Finance Director for Gatwick Airport from 2004 to 2006. [optin-monster-shortcode id=”wxhmli4jjedneglg1trq”]

Wesfarmers Managing Director Rob Scott expressed that he is very pleased with the appointment of Ms. Sarah Hunter as she has shown exceptional commerciality in her past and she is well prepared to lead the Officeworks team, as the business moves to its next phase of growth.

Recently, Wesfarmers Limited announced that Coles is going to be demerged into a separate ASX-listed company and the company is planning to retain 15 percent minority interest in Coles & 50 percent ownership stake in flybuys. The shareholders of the company are going to vote on Demerger at the shareholders meeting which is going to be held on 15 November 2018. Coles is well positioned to continue to grow and expected to be attractive to shareholders seeking earnings growth with defensive characteristics like Strong balance sheet, strong cash generation, and resilient earnings. It is expected that Wesfarmers will continue to invest in organic growth opportunities and its balance sheet will remain strong even after the Demerger.

Due to increase in the number of Bunning Australia and New Zealand (BANZ) store openings and acquisition of Kmart brand name for $100 million, the capital expenditure of the company increased by $134 million to $1,815 million in FY 2018 compared to the previous year. The capital expenditure for FY 2019 is expected to be around $1.2 billion to $1.7 billion. The net financial debt of the company decreased to $3.6 billion in FY 2018 from $4.3 billion in FY 2017. Due to a lower average debt level of the company the finance debt decreased by 16 percent in FY 2018 as compared to last year. Due to the strong results achieved by BANZ, departmental stores, and office works, the retained earnings of the company increased by 5.2 percent during the year.

In the past six months, the share price of the company increased by 16.58 percent as on 10 October 2018. WES’s shares traded at a $47.620 with a market capitalization of circa $55.5 billion as on 11 October 2018 (AEST 4:00 PM).

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