PRESS DIGEST-Australian Business News - June 23
Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Former Territory Resources board member Michael Kiernan will require approval from his former board members in order to acquire the gold assets of producer Monarch Gold from administration. Mr Kiernan's new venture Stirling Resources (SRE.AX) was placed into a trading halt yesterday pending an announcement over his recapitalisation plans for Monarch. In spite of discussions with Monarch Gold's administrators, Mr Kiernan said 'the people who are calling the shots are Territory Resources because they are the major shareholders in Monarch.' Page 20.
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Media analysts believe the Ten Network (TEN.AX) will post weak third-quarter results in spite of the televisions group's strong ratings since early May. Deutsche Bank analyst Andrew Anagnostellis has predicted a 52.3 percent decline in earnings on a 12 percent decline in revenue. 'Ten's ratings momentum has improved markedly following the launch of new programs...however, [it] will find it hard to monetise the ratings gains in the short term,' Mr Anagnostellis said. Page 20.
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Hastie Group (HST.AX) is seeking contracts and acquisitions following the building and maintenance service provider's A$77 million capital raising last month. According to managing director David Harris, the company is eager to add plumbing and fire services alongside its air-conditioning and electrical maintenance services which generated sales of A$923 million during the first half to December. 'Our main focus is organic growth but we are pursuing opportunities as they present themselves,' Mr Harris said yesterday. Page 45.
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Newly merged telecommunications company Vodafone Hutchison Australia (VHA) (HTA.AX) is seeking a new 10,000 square metre head office in Sydney. The search comes as staff at both Hutchison's 3 division and Vodafone were asked to reapply for their positions as the company seeks significant cost savings. Recently, VHA chief executive Nigel Dews said customer-facing staff would not be reduced, although the newly merged top team would be relocated to the new location. Page 45.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Brian McCarthy, the chief executive of Fairfax Media (FXJ.AX), has offloaded 350,000 shares, or 13 percent of his stake, to raise A$467,250. A spokesperson yesterday said the sale, which has reduced his personal holding to 777,163 shares, was for the purpose of 'personal debt reduction'. Page 17.
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Explosives, consumer products and industrial chemicals group Orica (ORI.AX) has said it is still looking to demerge its consumer products division, although it is unlikely to occur within the next year. Yesterday, an Orica spokesperson said the company was 'doing a lot of prepatory work and getting that little bit closer to being ready...but at this stage it's really a 'wait and see' on the market.' Last November, Orica scuttled plans to spin off its consumer products division due to the problems in the financial markets. Page 19.
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Australian Stock Exchange-listed industrial property company Goodman Group (GMG.AX) has had its long-term, unsecured credit rating reduced from Baa2 to Baa3 by ratings agency Moody's Investor Services. The downgrade was prompted by the group's high gearing and weak business outlook, and will result in the group's interest bill will rising by A$2 million a year, Goodman said. During April, fellow ratings agency Standard & Poor's reduced Goodman's long-term rating from BBB-plus to BBB, citing a weakened financial profile. Page 19.
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Hotel operator National Leisure and Gaming (NLG.AX) has offloaded two under-performing leaseholds in Queensland to Australian Leisure & Hospitality Group. The combined sales of A$12.5 million involve the Blue Pacific Hotel on Bribie Island and the Magnums venue at Airlie Beach. 'We expect these deals to set a benchmark in regard to the value of premium leasehold values, given that they represent arguably the most reliable case of willing buyer, willing seller in the leasehold market for some time,' NLG chief executive Andrew Jolliffe said yesterday. Page 19.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
The Australian Competition and Consumer Commission has commenced legal action in Melbourne alleging a cartel among four global manufacturers of marine hoses. According to the allegations, the manufacturers conspired to fix prices and to not compete with one another when oil firms including BHP Billiton (BHP.AX)(BLT.L), Woodside Petroleum (WPL.AX) and ExxonMobil (XOM.N) sought quotes for crucial equipment. Although a total of six manufacturers were involved in the international cartel, only four are being sued. Page 17.
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Telecommunications company Telstra (TLS.AX) has ended a six-year relationship with its advertising agency George Patterson Y&R. Telstra yesterday announced that George Patterson's contract overseeing direct marketing would cease in November, with direct mail to then be handled by rival Singleton Ogilvy & Mather. Additionally, Telstra's advertising business will be divided between Ogilvy and the Photon Group-owned (PGA.AX) Belgiovane Williams Mackay. Page 17.
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Steve Allen of advertising agency Fusion Strategy has revised his forecasts for the media sector, believing that demand will return 'quicker than anticipated by most'. The media buyer has described 2009 as one of the 'worst media market years on record,' in spite of low inflation and resilient retail sales. During the past six months, nearly all of the traditional media forms reported a fall in advertising demand of about 11 percent, twice the decrease anticipated by Mr Allen. Page 18.
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The Federal Government has requested tenders for the lead adviser role on the implementation study of its A$43 billion national broadband network (NBN). Sources reveal that groups including Boston Consulting Group, the pairing of KPMG and McKinsey, and a consortium consisting of Deloitte, AT Kearney and elements of the Acacia NBN bid were asked to tender for the nine-month study last week. Page 18.
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THE AGE (www.theage.com.au)
Analysis from SuperRatings has found that the most commonly held Australian superannuation balanced fund fell by 16.3 percent from May last year to May this year, pushing down the rolling three-year return to minus 1.5 percent per year. The independent research centre also found that cash and fixed interest investments did not lose their value, although these produced low returns. Separate research from consultancy Chant West also found that high-growth funds, which take more risk, suffered the greatest losses, posting a loss of 24.5 percent over the year. Page B1.
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The Commonwealth Bank of Australia (CBA.AX) has been criticised for continuing to charge interest on the loans of investors in collapsed financial trading company Storm Financial in spite of offering a suspension of repayment obligations. According to Bernie Ripoll, the head of a parliamentary inquiry into the collapse, the decision has 'sent a clear signal that the CBA is not genuine about' dealing with investor hardship. A CBA spokesman has confirmed that the offer to 'suspend repayment obligations' until August 31 would still include the charging of interest. Page B3.
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The Australian Infrastructure Fund's (AIX.AX) potential sale of its 10.1 percent stake in Melbourne airport owner Australian Pacific Airport Corporation has been retracted less than a week after its announcement. However, the fund previously stressed that the sale was not a certainty in spite of engaging in 'preliminary discussions' a month ago. According to Merrill Lynch analyst Matthew Spence, 'we are wondering what the motives are behind the sale. We think Melbourne Airport is a good asset with resilient traffic.' Page B3. --
