Yep, Office works doesn't work in the same space as Coles, it is more of a white collar Bunnings.
even worse, as there have been numerous Return of Capital events through the years. One for the accountant / estate !!
Yes I think estate resonates. Lol
@divs4ever Also their rural outlets and insurance businesses also.
yes if you view them as a LIC with mostly unlisted assets ( an investment shell if you like ) you realize they will buy/sell what they think is a good deal at the time ( probably all the companies under the WES are for sale at a generous price )
No longer the Co-op that my grandfather was involved in at the very start.
you may as well call WES an ETF in that case because, according to some, ETFs and LICs achieve similar results.
from Aug 2022 ......, I listed some of these instances.
Just clicked through these links. An Interesting corporate journeyOur history
www.wesfarmers.com.au
Our history
am not crying about buying into WES , and i only started buying them in 2015
DF when my grandfather passed on the Wesfarmers shares were divided up equally between the four siblings. I don't know how many thousands of shares were involved but when Mum got dementia my father gambled these and other shares that were gifted at the Perth casino. Hence the winner one James Packer.
That is just hugley inept capital management by Wesfarmers. Because they returned all that capital then years later hugely diluted the shares outstanding when they acquired Coles for a stupid sum of money. They probably paid about a 50% premium to intrinsic value for Coles at the height of the boom (and this is not hindsight I pointed it out to every stock market investor I knew at the time). After overpaying for Coles with a lot of debt funding, during the global financial crises after the share price tanked they did an emergency capital raising at rock bottom prices causing the shares outstanding to go through the roof. Richard Goyder is a muppet yet despite a blunder of that size they kept him on as chairman for years after the event. The moral of the story is 1) don't overpay for acquisitions and 2) keep a chased up balance sheet so if opportunities you can take advantage without stretching yourself. Instead they returned excess capital to boost the return on equity short-term but paid the price for it later with huge dilution. A business like Wesfarmers (i.e. a highly active conglomerate) should not be doing capital returns. If you have some extra cash do what Berkshire does and hold onto it for a few years until an opportunity arises. That is better in the long run than diluting shareholders massively later down the track.
that wasn't the opinion i remember by analysts at the time , they were amazed WES bought it at the time as several suitors looked it ( COL ) over and walked away without even throwing out a number from memory that still had Myer's in the group and some considered the group toxic
that seemed to be their specialty in earlier times , but is it still true , they bought Kidman Resources and Australian Pharmaceuticals and those results aren't in yet
1994 ... 100 per cent of Bunnings
Again highlights the ineptness of the board. Issuing shares in 2001 to acquire Howard Smith then 2 years later doing a capital return. The board doesn't know if they are coming or going. A confused constant revolving door of capital. If as a company over time you know you are going to be a net acquirer of business (their acquisitions have exceeded their sales of businesses over time) then you should not do capital returns and should keep the dividend payout ratio low. That way you don't need to keep diluting shareholders with constant share issuances.
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