Coles Myer chief sticks to $800m target
Coles Myer boss John Fletcher says the company can deliver on its promise of an $800 million profit by next year despite rising petrol prices.
The retail group reported a net profit of almost $625 million last week, up just more than 1 per cent.
Four years ago when Mr Fletcher took over as chief executive, he set an aspirational target of an $800 million profit within five years.
To deliver, the company will need a 22 per cent profit jump next year.
Mr Fletcher says higher petrol prices will make hitting the $800 million mark difficult but he remains "pretty confident" Coles Myer can achieve it.
"Customers are a little more cautious now because fuel's taking a bit more [of their money]," he told ABC TV's Inside Business program.
"That just makes the challenge a little more difficult."
Mr Fletcher says even if the company does not hit the target, setting the goal has been a success.
"At the end of the day what we've got to ask ourselves is, 'How different is this company five years after we started on this?' And by any sort of shareholder measure it's been a great achievement nonetheless," he said.
"My experience has been that if you set targets like that you generally get a better outcome than if you've either kept the target to yourself or set a lesser one.
"Will we still have a great business if it's missed? Sure. If we get it, which we think we will, it'll still be a great outcome.
"Either way, the test is always going to be, 'How much better are shareholders off at the end of '06 and '01?' and they'll be hugely better off."
Myer
As Coles Myer looks to sell off its Myer department stores, Mr Fletcher has refused to comment on an analysis that the stores need to fetch at least $600 million.
"This is a board review and a board decision," he said. "I don't want to comment on what analysts might think the business is worth.
"Ultimately, we will find out what the external market thinks it's worth and we can compare it with our own views about what that is."
Mr Fletcher says he doubts the buyer of the Myer stores would set up a discount department store chain to compete with his group's Target stores.
"No, look, people have said that, 'Could a new owner of Myer take the Myer business down market?' History says that that wouldn't be a smart thing to do," he said.
"If someone was interested in bringing another discount department store into the marketplace, they don't need Myer to do that. They could do it now."