PRESS DIGEST-Australian Business News - Nov 27
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)
Department store chain David Jones (DJS.AX) has reconfirmed it expects net profit to grow by 5 percent to 10 percent this financial year despite the financial crisis. The upmarket retailer says it now expects same-store sales to fall by 7.5 percent in each of the next three quarters, following a 6.1 percent fall during the first three months of the year. Despite the decline in sales, David Jones increased net profit by over 5 percent for the first quarter, and expects that a continued focus on reducing costs will enable profit guidance to be met. Page 18.
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Tabcorp Holdings (TAH.AX) has appointed Larry Mullin as chief executive of the gaming company's casino division with an initial four-year contract. Mr Mullin, who will take up the position at the beginning of February, is currently the chief operating officer of the Borgata Hotel Casino and Spa in the United States. Tabcorp is spending A$475 million refurbishing its flagship Star City complex in Sydney, and Tabcorp chief executive Elmer Funke Kupper says the Borgata is one of the models for the Star City's expansion. Page 18.
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The Australian Communications and Media Authority (ACMA) yesterday filed a court application seeking a civil penalty order against radio station 2UE for 13 breaches of the regulator's cash-for-comment rules by broadcaster John Laws. Mr Laws retired at the end of November, three weeks after the station was purchased by Fairfax Media. Fairfax and the ACMA have reached an agreement that media group will pay A$130,000 in penalties; however, the Federal Court will make the final decision on what penalty to apply. Page 18.
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Coca-Cola Amatil ,CCL.AX> chief executive Terry Davis has questioned the ability of brewer Lion Nathan LLN.AX to fund and execute its proposed takeover of the soft drinks group. Speaking at a conference in Sydney yesterday, Mr Davis also warned of the danger of using debt to fund takeovers in the current environment. Lion Nathan and its major shareholder, Japanese brewer Kirin, are continuing to push for the proposal, and are seeking talks with the Coca-Cola Company, whose support would be required for any takeover. Page 19.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Following BHP Billiton's (BHP.AX) withdrawal of its takeover bid for Rio Tinto (RIO.AX), Chinese aluminium producer Chinalco has said it may lift its stake in Rio to the 14.99 percent it is allowed under a Foreign Investment Review Board ruling. Chinalco reacted positively to news that BHP had abandoned its bid, believing it will benefit the Chinese steel industry. Despite having lost 75 percent of its original investment, Chinalco also expressed confidence in 'the fundamental value of the Rio Tinto Group.' Page 17.
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Moody's Investors Service yesterday announced it will conduct a review of Qantas Airways' (QAN.AX) credit rating. Moody's said it was conducting the review due to the airline's 64 percent pre-tax profit downgrade, to an expected A$500 million this year from A$1.4 billion for 2007-08. Analysts are now advising investors not to sell their shares in the airline but to be prepared for more bad news, with several warning that the worst effects of the downturn are yet to confront the airline. Page 18.
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Advertising agency DBB is believed to have won the multi-million dollar account for Coles supermarkets, following a review of Coles' brand strategy, which started two years ago. The appointment of DBB is one of the first major decisions to be taken by new marketing director Joe Blundell since his appointment in August. Coles is expected to announce the appointment tomorrow, after DBB won out over a shortlist which included Leo Burnett, JWT and George Patterson Y&R. Page 18. Continued...
