Australian GDP Expands 0.9%, Spotless Group Crashes 40%

Marcus Jacob
02 Dec, 2015
New York City

The benchmark ASX 200 dropped despite an increase of 0.9% in the third-quarter GDP. Collins Foods stock surged after KFC revenues and profit soared. Spotless Group tumbled 40% after the janitorial services provider issued 2016 profit warning.

[R]5:30 PM Sydney, Australia – The benchmark ASX 200 dropped despite an increase of 0.9% in the third-quarter GDP. Collins Foods stock surged after KFC revenues and profit soared. Spotless Group tumbled 40% after the janitorial services provider issued 2016 profit warning.[/R]

Stock markets in Australia closed slightly lower on Wednesday after weak corporate data overshadowed gross domestic product data.

Australian GDP grew 2.5% in the third quarter from a year ago and increased 0.9% over the previous quarter, the Australian Bureau of Statistics reported.

Analysts were expecting a quarterly gain of 0.8% in third quarter GDP.

Current account deficit in the third quarter narrowed to $18.10 billion from $20.5 billion in the second quarter.

Spotless Group, the commercial janitorial services provider tumbled 40% on profit warning for fiscal 2016 after its recent acquisitions failed to produce estimated synergies and profits.

The Australian dollar slid to 73.08 U.S. cents and stock trading turnover declined to 873 million shares worth $4.4 billion.

At the close, the ASX 200 Index fell 7.80 or 0.2% to 5,258.30, while the broader All Ordinaries Index decreased 7.90 to 5,304.70.

In commodities trading, gold fell US$3 to US$1,069 an ounce and Brent crude future for immediate month delivery slid 15 cents to US$44.29 a barrel.

IPO

Graphitecorp Limited surged 40% to 28 cents after the mining and exploration group priced its stock at 20 cents.

The stock opened at 30 cents and closed at 28 cents.

Hazer Group Limited soared 10% to 22 cents after the industrial technology provider priced its stock at 20 cents.

The stock opened at 25 cents and closed at 22 cents.

Australian Stock Movers

Cromwell Property Group added 0.48% to $1.04 after the company sold its New Way commercial office tower in Adelaide for about $73 million in Adelaide.

The company considers further opportunities to take advantage of investor demand and sell more properties, according to CEO Paul Weightman.

Collins Foods Limited jumped 13.1% to $4.40 after the company, which operates 175 KFC and 23 Sizzler restaurants in Australia, reported revenues in the first-half ending in October jumped 5.1% from a year ago to $269.7 million.

Same store sales at KFC restaurants in the period soared 5.2%, while same store sales at Sizzler Australia tumbled 12%.

Net profit in the period surged 33.6% to $14.3 million, compared to the same period a year ago.

Spotless Group Holdings Ltd tumbled 39.8% to $1.33 after the cleaning, catering and maintenance service provider released a disappointing market update.

Spotless estimates a decline in net profit of 10% for the year ending in June 2016 and operating profit is expected to remain unchanged.

Revenues for the year are expected to increase largely on the back of recent acquisitions.

Spotless has spent nearly $100 million on business acquisitions in the latest financial year.

Although the core business is still performing well, profit growth from new business has slowed due to tighter economic conditions and delays in tender decisions, the company said.