BUSINESS FORECASTING – AUSTRALIA

Local juniors under pressure after iron ore price slide

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Original article by Tess Ingram
The Australian Financial Review – Page: 15 & 20 : 6-Jul-15

The price of iron ore was trading at $US55.26 per tonne on 3 July 2015, having surrendered the bulk of recent gains during the week. UBS estimates that the break-even price for many smaller listed iron ore producers is just below the current price of iron ore, including BC Iron, Atlas Iron and Arrium. Glyn Lawcock of UBS notes that smaller iron ore miners have significantly reduced their costs since late 2014, and he expects further cost reductions in the next 12 months.

CORPORATES
UBS HOLDINGS PTY LTD, BC IRON LIMITED – ASX BCI, ATLAS IRON LIMITED – ASX AGO, ARRIUM LIMITED – ASX ARI, ROY HILL IRON ORE PTY LTD, MOUNT GIBSON IRON LIMITED – ASX MGX, GRANGE RESOURCES LIMITED – ASX GRR, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOOD MACKENZIE, AUSTRALIA. DEPT OF INDUSTRY AND SCIENCE, RBC CAPITAL MARKETS, CITIGROUP PTY LTD

Debt-free Pac Brands upgrades profit

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Original article by Sue Mitchell
The Australian Financial Review – Page: 23 : 3-Jul-15

Shares in Pacific Brands gained $A0.165 to close at $A0.49 on 2 July 2015, after the clothing and homewares group lifted its earnings forecast. Pacific Brands’ revised guidance is for 2014-15 underlying EBIT to be within the range of $A63m to $A65m, compared with market expectations of about $A60.1m. Meanwhile, asset sales have allowed the group to be free of debt for the first time since its sharemarket debut in 2004.

CORPORATES
PACIFIC BRANDS LIMITED – ASX PBG, BONDS INDUSTRIES LIMITED, SHERIDAN AUSTRALIA PTY LTD, HARD YAKKA, VOLLEY, GROSBY FOOTWEAR, KING GEE CLOTHING COMPANY, WESFARMERS LIMITED – ASX WES, EVERLAST PTY LTD, SLAZENGER, DUNLOP SPORT, ANCHORAGE CAPITAL PARTNERS PTY LTD, IBML CAPITAL PTY LTD, THE PAS GROUP LIMITED – ASX PGR, DESIGNWORKS LIMITED, WOOLWORTHS LIMITED – ASX WOW, BIG W DISCOUNT STORES, TARGET AUSTRALIA PTY LTD, LEGG MASON ASSET MANAGEMENT AUSTRALIA LIMITED

ANZ tipped to exit Asia banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 3-Jul-15

The ANZ Bank currently has a lower common equity tier 1 capital ratio than its peers, although at 8.7 per cent it is comfortably above the minimum requirement. However, Andrew Triggs of Deutsche Bank expects ANZ to offload some of its stakes in Asian banks in order to lift its capital ratio. He estimates that selling stakes in three of these banks – as well as the Esanda business – could boost ANZ’s capital ratio to more than 10 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DEUTSCHE BANK AG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ESANDA FINANCE CORPORATION LIMITED, PT PANIN BANK, AMBANK BERHAD, BANK OF TIANJIN COMPANY LIMITED, SHANGHAI RURAL COMMERCIAL BANK, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLYDESDALE BANK PLC, GREAT WESTERN BANK, UBS HOLDINGS PTY LTD, BLOOMBERG LP

A-REITs have a good year but a tough month

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Original article by Robert Harley
The Australian Financial Review – Page: 38 : 2-Jul-15

Australian real estate investment trusts generally performed well during 2014-15, although support for the sector turned bearish in the final month of the fiscal year. DEXUS Property Group, Mirvac Group and GPT Group in particular were heavily sold down in June 2015. BT Investment Management’s Julia Forrest expects mergers and acquisition activity to be a key driver for the sector in 2015-16.

CORPORATES
DEXUS PROPERTY GROUP – ASX DXS, MIRVAC GROUP – ASX MGR, GPT GROUP – ASX GPT, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, INVESTA PROPERTY GROUP, DOW JONES EQUITY ALL REIT TOTAL RETURN INDEX, MANULIFE FINANCIAL CORPORATION, BLOOMBERG LP, OMAN INVESTMENT FUND, FORTRESS CAPITAL ASSET MANAGEMENT, NIKKO ASSET MANAGEMENT GROUP, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COLES GROUP LIMITED, GIC REAL ESTATE PTE LTD

Banks among those at risk of downgrade

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 26 : 30-Jun-15

Citigroup has identified a number of Australian companies that could potentially issue earnings downgrades during the upcoming reporting season. They include Myer Holdings, BlueScope Steel, Fairfax Media, Bank of Queensland and Boart Longyear. Several companies have already issued earnings downgrades, including Flight Centre, Woolworths and SEEK. However, Citigroup believes that Caltex Australia and Wesfarmers could upgrade their earnings expectations.

CORPORATES
CITIGROUP PTY LTD, MYER HOLDINGS LIMITED – ASX MYR, BLUESCOPE STEEL LIMITED – ASX BSL, FAIRFAX MEDIA LIMITED – ASX FXJ, BANK OF QUEENSLAND LIMITED – ASX BOQ, BOART LONGYEAR LIMITED – ASX BLY, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, WOOLWORTHS LIMITED – ASX WOW, SEEK LIMITED – ASX SEK, CALTEX AUSTRALIA LIMITED – ASX CTX, WESFARMERS LIMITED – ASX WES, PACIFIC BRANDS LIMITED – ASX PBG, MONADELPHOUS GROUP LIMITED – ASX MND, NEWS CORPORATION – ASX NWS, APN NEWS AND MEDIA LIMITED – ASX APN, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, REECE AUSTRALIA LIMITED – ASX REH, McMILLAN SHAKESPEARE LIMITED – ASX MMS, TRADE ME GROUP LIMITED – ASX TME, REA GROUP LIMITED – ASX REA, SPARK NEW ZEALAND LIMITED – ASX SPK, ECHO ENTERTAINMENT GROUP LIMITED – ASX EGP, GWA GROUP LIMITED – ASX GWA, NEXTDC LIMITED – ASX NXT, METCASH LIMITED – ASX MTS, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

Woolworths serves up Thomas Dux

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 & 19 : 30-Jun-15

Australian-listed Woolworths has declined to comment on reports that it is seeking a buyer for its chain of Thomas Dux stores. However, it is believed to be aiming for a sale price of $A10m-$A20m for the grocery chain, which specialises on gourmet foods and comprises 10 outlets. Woolworths Holdings is seen as a possible buyer for the chain, although the South Africa-based group has denied that it has made overtures regarding Thomas Dux.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, THOMAS DUX GROCER, WOOLWORTHS HOLDINGS LIMITED, DAVID JONES LIMITED, ABOUT LIFE PTY LTD, JONES THE GROCER, L CAPITAL ASIA, LVMH MOET HENNESSY LOUIS VUITTON SA, BRIGHT FOOD GROUP COMPANY LIMITED, MANASSEN FOODS AUSTRALIA PTY LTD, SIMON JOHNSON PURVEYOR OF QUALITY FOODS PTY LTD, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BIG W DISCOUNT STORES

South32 may be a target

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Original article by Amanda Saunders
The Australian Financial Review – Page: 19 : 30-Jun-15

X2 Resources is estimated to have access to about $US13bn worth of equity and debt to finance acquisitions in the resources sector. BHP Billiton spin-off South32 is regarded as a potential target for X2, which is headed by former Xstrata CEO Mick Davis. South32 shares have shed around 20 per cent since the demerger, and it could well become a takeover target if the downturn is sustained. Glencore is also seen as a possible bidder for South32.

CORPORATES
X2 RESOURCES PARTNERS LP, SOUTH32 LIMITED – ASX S32, GLENCORE PLC, NOBLE GROUP LIMITED, TPG CAPITAL LP, BARRICK GOLD CORPORATION, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ANGLO AMERICAN PLC, CITIGROUP INCORPORATED, LIBERUM CAPITAL LIMITED, XSTRATA AG

GWA Group cuts earnings guidance

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Original article by Tim Binsted
The Australian Financial Review – Page: 15 : 30-Jun-15

GWA Group has advised that it will write down the value of the Gliderol garage doors business by around $A25m in its 2014-15 accounts. GWA has agreed to sell the business to Reliance Doors for about $A7m, after buying it for $A42m in 2010. Meanwhile, GWA now anticipates that its trading EBIT for the financial year will be within the range of $A67m to $A69m, compared with earlier guidance of about $A70m.

CORPORATES
GWA GROUP LIMITED – ASX GWA, GLIDEROL ROLLER DOORS PTY LTD, RELIANCE DOORS PTY LTD, DUX HOT WATER, BRIVIS, CAROMA INDUSTRIES LIMITED, GAINSBOROUGH, FOWLER, HUNTER GREEN PTY LTD

Australian deal activity tipped to reach next peak in 2018

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 13 & 18 : 30-Jun-15

The value of completed mergers and acquisitions in Australia is expected to total $US74.1bn ($A96.1bn) in 2015, according to a report by Oxford Economics. This compares with $US73.7bn in 2014. The report, which was produced on behalf of law firm Baker & McKenzie, also forecasts that the value of local M&A deals will top $US126.3bn in 2018, followed by a fall in the next two years. Meanwhile, some $US2.4bn ($A3.1bn) worth of IPOs are expected to be undertaken in Australia in 2015, with IPO activity rising to $US6.6bn in 2018.

CORPORATES
OXFORD ECONOMICS LIMITED, BAKER AND McKENZIE, UBS HOLDINGS PTY LTD, MACQUARIE CAPITAL PTY LTD, GRANT SAMUEL AND ASSOCIATES PTY LTD

More mining collapses ‘inevitable’

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Original article by Amanda Saunders
The Australian Financial Review – Page: 18 : 29-Jun-15

KordaMentha’s Scott Langdon expects more Australian mining services groups to experience financial problems in 2015. He says privately-owned firms whose turnover is below $A50m are most vulnerable to insolvency. However, Langdon adds that investors and lenders will seek alternatives to insolvency such as debt restructuring deals. He also forecasts an increase in cost reduction measures in the resources sector, such as staff and wage cuts, as well as the departure of some CEOs.

CORPORATES
KORDA MENTHA AND COLLEAGUES PTY LTD, BRADKEN LIMITED – ASX BKN, BIS INDUSTRIES LIMITED, ATLAS IRON LIMITED – ASX AGO, SIGDO KOPPERS SA, CHAMP PRIVATE EQUITY PTY LTD