SYDNEY, Feb 24 (Reuters) - Australia's biggest retail group Wesfarmers Ltd WES.AX posted a small rise in half year profit with strong performances across its retail businesses offsetting weakness in its resources division.
Wesfarmers, which owns the Coles supermarket chain, said profit for the six months ending December 31 totalled A$1.39 billion, up a touch from the A$1.38 billion reported during the same six month period last year. expect Wesfarmers to report full-year net income to total A$2.51 billion.
"Overall, return on capital for the retail portfolio improved strongly as a continuing focus on capital efficiency further leveraged the earnings growth recorded," Managing Director Richard Goyder said in a statement.
Yet, Wesfarmers has been battling a step-up in competition brought about by new entrants such as Aldi, contributing to three profit forecast downgrades last year.
With the challenge in the food grocery sector, Wesfarmers last month agreed a A$1.7 billion expansion into Britain's hardware sector, betting on an extension of the "do-it-yourself" craze that turned its Bunnings stores into the market leader at home.
Wesfarmers' overseas expansion highlights the confidence it has gained in the DIY sector since buying Bunnings Warehouse two decades ago.
The chain has ridden a housing boom and a fixation with property-focused TV shows to now hold a 40 percent share of Australia's A$40 billion home improvement market.