CORPORATE PROFITS – AUSTRALIA

Reporting season ups and downs

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Original article by Philip Baker
The Australian Financial Review – Page: 34 : 2-Feb-16

Australia’s benchmark S&P/ASX 200 Index has shed five per cent so far in 2016, and share price performances are likely to come under scrutiny during the February reporting season. Matt Ross of Goldman Sachs says price-earnings multiples are five per cent lower than they were in the lead-up to the August 2015 reporting season. He adds that growth in earnings-per-share is now at its lowest level since the global financial crisis.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, BEGA CHEESE LIMITED – ASX BGA, COLES GROUP LIMITED, MURRAY GOULBURN CO-OPERATIVE COMPANY LIMITED, MG UNIT TRUST – ASX MGC, REA GROUP LIMITED – ASX REA, ISENTIA GROUP LIMITED – ASX ISD, RAMSAY HEALTH CARE LIMITED – ASX RHC, CSL LIMITED – ASX CSL, CARSALES.COM LIMITED – ASX CAR, SEEK LIMITED – ASX SEK, ARB CORPORATION LIMITED – ASX ARB, TATTS GROUP LIMITED – ASX TTS, QUBE HOLDINGS LIMITED – ASX QUB, IRESS LIMITED – ASX IRE, PREMIER INVESTMENTS LIMITED – ASX PMV, HEALTHSCOPE LIMITED – ASX HSO, TABCORP HOLDINGS LIMITED – ASX TAH, TRADE ME GROUP LIMITED – ASX TME, BRAMBLES LIMITED – ASX BXB, MYOB GROUP LIMITED – ASX MYO, WESFARMERS LIMITED – ASX WES, SELECT HARVESTS LIMITED – ASX SHV, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, JB HI-FI LIMITED – ASX JBH, SONIC HEALTHCARE LIMITED – ASX SHL, VOCUS COMMUNICATIONS LIMITED – ASX VOC, CHALLENGER LIMITED – ASX CGF, MONADELPHOUS GROUP LIMITED – ASX MND

Trusts on track for good profit season

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 32 : 1-Feb-16

The Australian sharemarket shed more than five per cent during January 2016, although the S&P/ASX 200 A-REIT index achieved a total return of more than one per cent. Meanwhile, Goodman Group and Vicinity Centres are among the listed property trusts that have reported a rise in the value of their portfolios. Investors will be awaiting the February reporting season, which among other things will show how the trusts’ retail tenants performed during the Christmas sales period.

CORPORATES
STANDARD AND POOR’S ASX 200 A-REIT INDEX, GOODMAN GROUP – ASX GMG, VICINITY CENTRES – ASX VCX, DEXUS PROPERTY GROUP – ASX DXS, SCENTRE GROUP – ASX SCG, WESTFIELD CORPORATION – ASX WFD, PHOENIX PORTFOLIOS PTY LTD, MORNINGSTAR PTY LTD, INVESTA OFFICE FUND – ASX IOF, MIRVAC GROUP – ASX MGR, STOCKLAND – ASX SGP

Small caps tipped to lift tough reporting season

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 13 & 22 : 1-Feb-16

The consensus of analysts is that the Australian sharemarket’s earnings per share will decline by six per cent in the February 2016 reporting season. However, a 45.5 per cent fall in earnings per share is forecast for the resources sector. Donald Williams of Platypus Asset Management is bearish about the outlook for the sector, warning that commodity prices are unlikely to rebound for several years. Meanwhile, Morgan Stanley expects stocks outside the top 20 to perform the best.

CORPORATES
PLATYPUS ASSET MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, BHP BILLITON LIMITED – ASX BHP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, AMCOR LIMITED – ASX AMC, ANSELL LIMITED – ASX ANN, MACQUARIE GROUP LIMITED – ASX MQG, COCA-COLA AMATIL LIMITED – ASX CCL, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, MANTRA GROUP LIMITED – ASX MTR, AVEO GROUP – ASX AOG, BURSON GROUP LIMITED – ASX BAP, CSG LIMITED – ASX CSV, TELSTRA CORPORATION LIMITED – ASX TLS, TABCORP HOLDINGS LIMITED – ASX TAH, REA GROUP LIMITED – ASX REA, GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA, UNITED STATES. FEDERAL RESERVE BOARD

AFIC hunts for quality mid-cap investments

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Original article by Ruth Liew
The Australian Financial Review – Page: 17 : 21-Jan-16

The Australian Foundation Investment Company has posted a 2015-16 interim profit of $A145.5m, which is 10.3 per cent higher than previously. The listed investment company’s revenue was 7.2 per cent higher at $A156.6m, although its investment portfolio generated a loss of 1.3 per cent for the half-year. The group has reduced its exposure to large banks and retailers, and increased its holdings of stocks such as Qube Holdings, Suncorp Group and Treasury Wine Estates.

CORPORATES
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, QUBE HOLDINGS LIMITED – ASX QUB, SUNCORP GROUP LIMITED – ASX SUN, TREASURY WINE ESTATES LIMITED – ASX TWE, HEALTHSCOPE LIMITED – ASX HSO, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, WESFARMERS LIMITED – ASX WES, WOOLWORTHS LIMITED – ASX WOW, CHALLENGER LIMITED – ASX CGF, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MAINFREIGHT LIMITED, INTEGRAL DIAGNOSTICS LIMITED – ASX IDX, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, OIL SEARCH LIMITED – ASX OSH, SANTOS LIMITED – ASX STO, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, UNITED STATES. FEDERAL RESERVE BOARD

Ratings agency predicts weaker bank profit growth in 2016

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 20-Jan-16

Fitch Ratings warns that Australian banks are likely to face lower growth in earnings in 2016, citing factors such as a rise in bad loans, an increase in the cost of funding and stronger competition in the sector. However, the ratings agency notes that capital raisings in 2015 mean the four major banks are well-placed to handle any increase in bad loans.

CORPORATES
FITCH RATINGS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, RESERVE BANK OF AUSTRALIA

Oil price drop to fuel Qantas profit

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Original article by Jamie Freed
The Australian Financial Review – Page: 15 : 11-Jan-16

Paul Butler of Credit Suisse says the sharp decline in the price of Brent crude oil and jet fuel in recent months should boost the earnings of Qantas over the next two years. Shareholders at the carrier’s 2015 annual meeting were told that its fuel bill for 2015-16 will be around $A3.61bn, but Butler forecasts that this could potentially fall by around $A110m. He adds that hedging could allow Qantas to slash its fuel costs by another $A160m in 2016-17.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, CREDIT SUISSE (AUSTRALIA) LIMITED, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, STANDARD AND POOR’S CORPORATION, MERRILL LYNCH (AUSTRALIA) PTY LTD, DEUTSCHE BANK AG

Costco profit surges as sales exceed $1b

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 21-Dec-15

Costco Wholesale Australia has posted a pre-tax profit of $A22.7m for the year ended August 2015, following a loss of $A10.7m previously. The grocery retailer’s revenue rose from $A878.5m to $A1.323bn, while its gross margin increased from 14.3 per cent to 14.6 per cent. IBISWorld estimates that Costco now boasts about 1.2 per cent of Australia’s grocery market, six years after opening its first Australian store.

CORPORATES
COSTCO WHOLESALE AUSTRALIA PTY LTD, IBISWORLD PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, MYER HOLDINGS LIMITED – ASX MYR, DAVID JONES LIMITED, COSTCO WHOLESALE CORPORATION

BHP should slash dividend by half: analyst

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Original article by James Thomson
The Australian Financial Review – Page: 16 : 17-Dec-15

Paul McTaggart of Credit Suisse says BHP Billiton should drop its commitment to a progressive dividend policy and reduce its annual payment of $US1.24 per share by 50 per cent. Credit Suisse recently downgraded its earnings forecasts for BHP in both 2015-16 and 2016-17, and McTaggart says the lower earnings outlook means BHP cannot afford to keep its dividend payout at the current level.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED

Domino’s soars on European deals

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 & 18 : 17-Dec-15

Australian-listed Domino’s Pizza Enterprises now expects 30 per cent growth in its 2016 underlying EBITDA and net profits. The group had only recently upgraded its earnings guidance to 25 per cent growth. It will also acquire German pizza chain Joey’s via a joint venture with UK-based Domino’s Pizza Group. Meanwhile, Domino’s Pizza Enterprises has secured long-term extensions to its master franchise rights to the Domino’s brand in several European countries.

CORPORATES
DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, DOMINO’S PIZZA GROUP PLC, DOMINO’S PIZZA INCORPORATED, JOEY’S PIZZA, PLATYPUS ASSET MANAGEMENT PTY LTD, PIZZA SPRINT

Qantas shares bumper profit with investors

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Original article by Jamie Freed
The Australian Financial Review – Page: 13 & 18 : 16-Dec-15

Qantas expects a 2015-16 interim underlying pre-tax profit of $A875m to $A925m, compared with $A367m for the previous corresponding period. The airline has benefited from factors such as lower fuel prices, higher revenue and cost reductions in the current half-year. CEO Allan Joyce has signalled that Qantas will look at returning surplus cash to shareholders in the next several years, while Matthew Spence of Merrill Lynch expects the carrier to launch a share buyback with the release of its half-year accounts.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, MERRILL LYNCH (AUSTRALIA) PTY LTD, JETSTAR AIRLINES PTY LTD, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, WOOLWORTHS LIMITED – ASX WOW, BP AUSTRALIA LIMITED