By Mike Cherney

SYDNEY--Australian conglomerate Wesfarmers Ltd. said annual net profit surged 40% on a strong performance in its retail businesses and that it is pursuing a one-off payout to shareholders in addition to its usual dividend.

Wesfarmers said that net profit in fiscal 2021, which ended in June, rose 40% to 2.38 billion Australian dollars (US$1.72 billion). On a continuing-operations basis, profit rose 47%. Revenue rose 10% to A$33.9 billion and earnings before interest and tax rose 19% to A$3.8 billion.

The company declared a final dividend of 90 Australian cents per share, bringing the year's full ordinary dividend to A$1.78, a 17% rise on the prior year.

Wesfarmers also separately announced a A$2.00/share capital return to shareholders. The company said the A$2.27 billion distribution needs to be approved by shareholders at its upcoming annual meeting. It added the distribution would enable a more efficient capital structure while also maintaining balance-sheet flexibility to take advantage of opportunities should they arise.

Wesfarmers said sales in the first few weeks of fiscal 2022 had declined in its Bunnings hardware chain, Kmart and Target discount department stores and Officeworks office-products chain because of recent lockdowns. Authorities are battling the highly infectious Delta strain of the coronavirus and many retailers have been required to close their stores during the lockdowns, though online trading can continue.

Wesfarmers said Bunnings sales growth is down about 5%, Kmart and Target down about 14% and Officeworks down more than 1% to start fiscal 2022. It added that Bunnings and Officeworks sales are higher on a two-year basis.

Wesfarmers said it is possible that fiscal first half earnings in its retail businesses would be below the prior period. It also said the performance of its industrial businesses would be dependent on commodity prices, foreign exchange rates, competitive factors and seasonal impacts.

However, on a more long-term basis, Wesfarmers said it is well-positioned to withstand a range of economic conditions and that it would deliver satisfactory shareholder returns.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

08-26-21 1855ET