Wesfarmers last year paid $705 million for the Homebase chain and flagged it would spend up to $1 billion re-branding the stores and overhauling its product range in the hope of replicating the roaring success Bunnings enjoys in Australia.

But that is proving harder than expected and on Thursday Wesfarmers revealed Bunnings UK and Ireland [BUKI] swung to a $89 million loss in its first full financial year under Wesfarmers' ownership and would take longer than expected to turn a profit.

Bunnings Group managing director Michael Schneider said sales had been hurt as it moved Homebase's 251 stores away from kitchen and bathroom products and towards Bunnings' staples of garden and home improvement products.

It would take time for shoppers who were used to promotional pricing to trust Bunnings' "everyday low price" strategy, which had been received well at its four pilot BUKI stores, Mr Schneider said.

"It's going to be a long slog, but certainly from what we're seeing in the way we've established the Bunnings pilots is that they're performing well," he said.

Homebase had been profitable, recording earnings before interest and tax of $52 million in the 12 months before Bunnings bought it.

Wesfarmers' outgoing chief executive Richard Goyder said BUKI would be loss-making "for a while yet", but backed the investment.

"One of the regrets I have in leaving is I won't be around to see BUKI achieve what I think it can achieve," he said.

Citi analyst Bryan Raymond said Bunnings' loss in the UK and Ireland was $29 million larger than he anticipated, while Credit Suisse analyst Grant Saligari said the lack of information on the pilot's performance would not be received well.

"From a Wesfarmers perspective, the Bunnings store pilots in the UK simply have to work as the alternative is too horrible to contemplate," Mr Saligari said.

Earnings at Bunnings' local arm jumped 10 per cent to $1.3 billion in the 12 months to June 30, which along with Wesfarmers' coal assets buoyed the conglomerate as profit from Coles slipped.

Earnings before interest and tax at Coles fell 13 per cent to $1.6 billion as same-store growth slipped from 4.1 per cent to 1 per cent and total revenue stagnated. Management said the result had to be viewed in the context of weak market growth, Woolworths' $1 billion investment in cutting prices, and Aldi branching into South Australia and Western Australia.

"Actually I would have expected probably a worse set of sales numbers," Coles managing director John Durkan said.

The supermarket pumped about $360 million into its annual cost base last year to cut prices and improve service and product availability, and Mr Durkan warned investors not to expect an improvement in earnings until the second half of 2017/18 when it would start to enjoy savings from product simplification.

Stronger coal prices sent revenue from Wesfarmers' resources division up $738 million to $1.78 billion, with EBIT swinging from $310 million loss in 2016 to a $405 million profit.

Kmart grew earnings 17.7 per cent to $553 million off 7.5 per cent sales growth but sister chain Target again into the red, reporting a $10 million loss - including $13 million in costs from moving its head office - compared to a $195 million loss a year earlier.

Wesfarmers' net profit after tax for the 12 months to June 30 was $2.87 billion, up 27 per cent from $2.25 billion in 2016. Profit was $407 million in 2016 when impairments against Target and coal assets are included.

Credit Suisse's Mr Saligari said that there were few surprises in the result but that the apparent "sameness" of improvement initiatives at Coles' "begs the question of broader strategic responses".

Wesfarmers declared a fully franked final dividend of $2.23 per share, up from $1.86. Shares jumped as much as 2.5 per cent in early trade but later fell to close down 0.1 per cent at $41.67.

Correction:A earlier version of this article wrongly attributed a quote about Bunnings' store pilots in the UK to Citi analyst Bryan Raymond. The quote was from Credit Suisse analyst Grant Saligari.