BUSINESS FORECASTING – AUSTRALIA

IAG focuses on the bottom line

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Original article by Michael Bennet
The Australian – Page: 21 : 20-Aug-14

Insurance Australia Group (IAG) has announced a 2013-14 full-year net profit increase of 59% to $A1.23bn, as gross written premiums also lifted 3% to reach $A9.8bn. The 12-month distribution has been boosted 8.3% to $A0.39, and on 19 August 2014 the stock closed $A0.03 higher at $A6.20. CEO Mike Wilkins said the Australian-listed company would focus on improved margins rather than to defend market share, as smaller rivals such as Youi, Budget and Progressive as well as supermarket chains and major banks expand their business

CORPORATES
INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, QBE INSURANCE GROUP LIMITED – ASX QBE, SUNCORP GROUP LIMITED – ASX SUN, ALLIANZ AUSTRALIA LIMITED, YOUI PTY LTD, BUDGET DIRECT INSURANCE AGENCY PTY LTD, PROGRESSIVE DIRECT INSURANCE COMPANY, NRMA INSURANCE LIMITED, SGIO INSURANCE LIMITED, WESFARMERS LIMITED – ASX WES, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD

Forecasts dip as economy slackens

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Original article by Bianca Hartge-Hazelman
The Australian Financial Review – Page: 28 : 20-Aug-14

The Australian sharemarket has gained 3.5 per cent so far in 2014, although it has risen by 27 per cent in the last two years. Tony Brennan of Citigroup forecasts that the benchmark S&P/ASX 200 Index will end the year at 5,750 points. However, he warns that the market has lowered earnings expectations for 2014-15 by 0.5 per cent so far, and this could be scaled back further

CORPORATES
CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, ARNHEM INVESTMENT MANAGEMENT PTY LTD, SUNCORP GROUP LIMITED – ASX SUN, TELSTRA CORPORATION LIMITED – ASX TLS, RIO TINTO LIMITED – ASX RIO, COMPUTERSHARE LIMITED – ASX CPU, JAMES HARDIE INDUSTRIES PLC – ASX JHX, BLOOMBERG LP, LEUTHOLD GROUP LLC, BARCLAYS BANK PLC, NEWS CORPORATION – ASX NWS, FAIRFAX MEDIA LIMITED – ASX FXJ, DOWNER EDI LIMITED – ASX DOW, LEIGHTON HOLDINGS LIMITED – ASX LEI

A leaner BHP is taking shape

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Original article by Barry FitzGerald, Sarah-Jane Tasker
The Australian – Page: 17 : 18-Aug-14

BHP Billiton CEO Andrew Mackenzie is rolling out his "four pillars" strategy of concentrating on the core iron ore, coal, copper and petroleum divisions. A potential hiving-off of other assets into a separately-listed entity will be discussed at the 2013-14 results presentation on 19 August 2014, at which BHP is also tipped to unveil a profit rise of 27% to $US13.8bn ($A14.8bn). The 12-month distribution is forecast to be lifted to above $US1.20 from $US1.16 previously. However a stock repurchasing scheme worth up to $US5bn is now less likely, due to the spin-off move

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CITIGROUP PTY LTD, PENGANA CAPITAL LIMITED

Fairfax eyes more cuts in the race to stem revenue bleed

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Original article by Darren Davidson
The Australian – Page: 17 : 15-Aug-14

Fairfax Media has announced a 2013-14 full-year net profit of $A224.4m post-tax, after a 2012-13 loss of $A15.5m. Excluding abnormal gains from the divestment of the Stayz and InvestSmart businesses, the operating earnings were up 1.8% to reach $A306.4m. Revenue in the newspapers division was down 9.2% to $A803.2m, and that of the radio assets 6% to $A103.8m. However at the Domain property wed site unit it grew 15.5% to $A146.6m. CEO Greg Hywood signalled further cost reductions, and investors pushed Fairfax shares $A0.06 higher to a close of $A0.94 on 14 August 2014

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, DOMAIN.COM.AU, STAYZ PTY LTD, INVESTSMART FINANCIAL SERVICES PTY LTD, HANCOCK PROSPECTING PTY LTD, CITIGROUP PTY LTD

Popular Aldi threatens Woolworths, Coles duopoly

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Original article by Sue Mitchell
The Australian Financial Review – Page: 1 & 12 : 15-Aug-14

Aldi currently boasts annual sales of about $A5.3bn in Australia. A UBS report estimates that Aldi could potentially lift its sales to $A9.3bn in the next five year. The firm forecasts that the annual sales of Coles, Woolworths and Metcash could be slashed by $A250m to $A350m by 2019 due to the growth of Aldi. Ben Gilbert of UBS notes that Aldi could achieve even stronger growth if it addresses issues such as the quality of its fresh food and long queues at checkouts, which are negatively affecting consumer sentiment toward the group

CORPORATES
ALDI STORES SUPERMARKETS PTY LTD, UBS HOLDINGS PTY LTD, COLES GROUP LIMITED, WOOLWORTHS LIMITED – ASX WOW, METCASH LIMITED – ASX MTS, TESCO PLC, J SAINSBURY PLC, ASDA GROUP PLC, MORRISONS, LIDL GMBH & CO KG, ROY MORGAN RESEARCH LIMITED

Money on Echo as it shows a good hand

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Original article by Jessica Gardner
The Australian Financial Review – Page: 19 & 24 : 14-Aug-14

The stock of gaming group Echo Entertainment on 13 August 2014 closed 3.1% higher at $A3.30. It had posted a 2013-14 full-year net profit increase of 27.3% to $A106.3m, or 24.6% to $A158.2m excluding abnormal gains from "high rollers". Revenue from its New South Wales and Queensland casino operations also grew 3.9% to reach $A1.8bn. A distribution of $A0.04 has been declared. CEO Matt Bekier noted that strong earnings growth for Echo should now be seen as a given

CORPORATES
ECHO ENTERTAINMENT GROUP LIMITED – ASX EGP, CROWN RESORTS LIMITED – ASX CWN, THE STAR, CITIGROUP PTY LTD

Confidence lifts but jobs lag

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Original article by Adam Creighton
The Australian – Page: 21 : 13-Aug-14

The latest data compiled by National Australia Bank on the nation’s businesses, excluding agriculture, show that both confidence and trading conditions improved in July 2014. The latter are now at levels last witnessed in 2010, while sentiment is at the best reading since the global financial crisis. New Australian Bureau of Statistics figures also indicate residential real estate prices growth of 10.1% for 2013-14. However the jobless rate for July was up as well, to 6.4%. This was the worst result in a dozen years

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COMMONWEALTH SECURITIES LIMITED, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED

Drop in tablet sales proves a bitter pill for JB Hi-Fi

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Original article by Bridget Carter
The Australian – Page: 19 : 12-Aug-14

Electronic goods retailer JB Hi-Fi has announced a 2013-14 full-year net profit increase of 10.3% to $A128.4m, as had been tipped. Turnover grew 5.3% to reach $A3.48bn, and was up 2% on a like-for-like basis. However the company also conceded that revenue declined 5.5% year-on-year during the month of July 2014, as consumers bought fewer tablet computers. CEO Richard Murray said new devices would compensate for this during the course of 2014-15. The 12-month distribution is $A0.84, up 16.7%, and on 11 August the stock fell $A1.53 to close at $A17.84.

CORPORATES
JB HI-FI LIMITED – ASX JBH, JB HI-FI HOME, MOELIS AND COMPANY

Banks count on trust to fend off new players

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Original article by Michael Bennet
The Australian – Page: 21 : 12-Aug-14

Bendigo & Adelaide Bank CEO Mike Hirst has commented on the new competition posed to the banking sector in Australia and globally by electronic payment services providers such as PayPal. He noted that these challengers lack the trust consumers still have in the established banks, which also command larger holdings in their accounts. Hirst argued that the main threat to the industry was a potential serious data breach by computer hackers, which would erode the confidence customers have in the institutions

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, PAYPAL INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG

Takeover rush fuelled by cheap debt could shrink index

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Original article by Vesna Poljak
The Australian Financial Review – Page: 30 : 7-Aug-14

Hasan Tevfik of Credit Suisse expects Australia’s benchmark S&P/ASX 200 Index to reach 6,000 points by the end of 2014. He forecasts that the low cost of funding via debt markets will lead to an upturn in takeover activity in Australia. This in turn will result in the number of companies that are acquired or undertake buybacks exceeding IPO and capital raising activity

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, STANDARD AND POOR’S ASX 200 INDEX, DAVID JONES LIMITED – ASX DJS, AUSTRALAND PROPERTY GROUP – ASX ALZ, TREASURY WINE ESTATES LIMITED – ASX TWE, UNITED STATES. FEDERAL RESERVE BOARD, BUSINESS 20 (B20), RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA