Q: Were Wesfarmers� earnings above, in line with, or below your expectations?

Peter Warnes: The Wesfarmers FY '12 ENPAT of $2.126 billion was slightly below our expectations of $2.172 billion, but it was tinged with conservatism. There is a $40 million provision - restructuring provision for Target and in the insurance division there was $108 million increase to reserves following the February, Christchurch earthquake. So those are non-recurring and let's say a conservative number $2.126 billion, but just slightly below our expectations.

Q: Was the dividend above, in line with, or below your expectations?

Warnes: Dividend was in line with expectations. We were looking for $0.95 in second half to take it to $1.65 for the full year and that�s exactly where it came in. The pay-out ratio are relatively high at 90%, however the excellent shape of the balance sheet and strong cash flow generation should see Wesfarmers continue to have a pay-out ratio between 85% and 90% in future.

Q: What were the key drivers of the result?

Warnes: Key driver of this result, which was up 10.6% year-on-year was the continued resurgence of Coles, food and liquor, with the emphasis on food. Coles head line sales were up 4.6%, but the EBIT jumped 15% with a very, very strong performance in margins up 42 points from 4.28% to 4.7%. But the exit margin if you like the second half margin broke new ground at 5.18% and that�s� an excellent performance.

Coles have really starting to fire on the volume side, in other words, foot traffic, basket size is pushing volume along and the supply chain has really started to become significantly more efficient right from sourcing all the way through to the cost of getting the goods on the shelf that is now driving their margin nicely.

Elsewhere, Kmart was a very, very good performance and strong EBIT growth up almost 30% and the margin moving from just over 5% to 6.6%, which is excellent in a very, very difficult discretionary retail environment. Elsewhere industrial and safety was nicely up as was the chemicals, energy and fertilisers and Bunnings whilst not spectacular was very solid.

Q: Was there anything about the result that surprised you?

Warnes: Surprises were all on the positive side. Wesfarmers, as we know, is a conglomerate and conglomerates are very, very difficult to manage and control and Wesfarmers do it very well. All the operations had underlying positive growth and that is testament to very strong management and good cost control.

There are eight individual divisions, if you like, but there are many, many more businesses within some of those divisions and to get them all reporting underlying growth in both revenue and profit is an excellent performance and that was a very, very pleasing surprise.

Surprises, as I mentioned earlier, were certainly Kmart and Coles, and the Coles food operations in particular because the liquor operations are a drag on Coles food and liquor - the opposite the case in Woolworths, but that really highlights the excellent performance of the Coles food operations, and we do anticipate with liquor we�ll pick up going through into FY '13.