As Wesfarmers moves closer to splitting out Coles, the long-term prospects of Bunnings are coming under renewed scrutiny.
Bunnings Australia and New Zealand will account for about 55 per cent of Wesfarmers’ earnings and 65 per cent of its value after Coles is spun off as a separately listed company in 2019 assuming Wesfarmers does not make a major acquisition in the near term.
After years of double-digit earnings growth and high single-digit sales growth at Bunnings, analysts and investors are querying how long the dominant player in Australia’s $50 billion home improvement market can continue to take market share and deliver above-average returns.
“As it gets larger it will become harder to grow,” said Argo Investments chi…
Read the full article at: http://www.afr.com/business/retail/wesfarmers-coles-demerger-increases-exposure-to-bunnings-20180425-h0z86h