Goyder angered by 'nonsense' talk
UPDATE 2.30pm: Wesfarmers managing director Richard Goyder has defended a fall in the conglomerate's return on equity since buying Coles, hitting out at "nonsense" commentary on the subject.
Mr Goyder said the issue - one of his biggest frustrations since the $20 billion acquisition in 2007 - resurfaced with the appointment of former managing director Michael Chaney as Wesfarmers chairman last week.
Mr Goyder cited commentators who had said: 'It's a great thing Chaney's coming back on board because he might resurrect Wesfarmers' return on equity'.
"It's just a nonsense comment," he told an investor strategy briefing day in Sydney.
"We could have a terrific ROE now and no business.
"And we'd be sitting here with about 15 of you because we'd be an ASX-200 company probably."
Mr Goyder said there was a strong correlation between growing return on capital in a businesses and shareholder returns.
"Quite clearly, the acquisition of Coles has been accretive for our shareholders over time, and our ROE has fallen," he said.
"We would have no difficulty in diluting group ROE for the right acquisition."
Finance director Terry Bowen said while dilution was inevitable with a major acquisition, it was a better measure than earnings per share.
"You could actually do some really bad things in the current environment just focusing on earnings per share," he said.
Wesfarmers shares were off 28 cents to $43.43 at the close.
