Bunnings Eyes Masters Locations

Thursday, February 25th, 2016
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Wesfarmers has confirmed it is interested in 15 Masters’ sites.

Home improvement managing director John Gillam says he is watching carefully what will happen to Masters after Woolworths announced last month that it will either sell or mothball the loss-making DIY retailer.

Mr Gillam says Bunnings is interested in a small number of Masters properties.

“In rough terms, there are over 100 properties all up, 63 developed into stores and there are 15 or so that we are interested in,” he said.

“Some of those are in areas where we will have a long term plan to have a store, others are replacements.

“We think we will have strong competition. We don’t think for a second that we are the only ones looking at the opportunities here.”

He said if Masters were to close and undergo a fire sale it would have a short-term impact on Bunnings.

“It is too early to predict the impact or how it would play out (because) there is no clarity around the quantam or the disposal approach,” he said.

“It looks like that will present a bump or two in the road in the second half.”

Bunnings will expand to the United Kingdom with the acquisition of British DIY chain Homebase.

Homebase’s parent company Home Retail Group will put Wesfarmers $700 million takeover offer to a shareholder vote overnight, Australian time.

Bunnings had a strong first half with revenue jumping 10.9 per cent to $5.5 billion in the six months to December 31.

The retailer’s earnings before interest and tax rose 13.4 per cent to $701 million.

Its strong result combined with Coles strong performance in the half helped lift Wesfarmers net profit 1.2 per cent to about $1.4 billion.

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