Woolworths and Westfield Earnings Rise

123jump.com Staff
27 Feb, 2008
New York City

Australia''s biggest retailer, Woolworths Ltd posted first-half net income rise of 28% to $891.3 million in the six months ended Dec. 30 on the back of an 8.6% growth in sales, growth in sales declined from 15.9% in fiscal 2007. Westfield, largest mall operator reported 2007 earnings rose 11.6% on steady rise in retail sales at its locations. NAB hinted that it is pursuing acquisition in the Northwest region of the U.S.

[R]3:00AM New York, 7:00PM Sydney- ASX 200 index gained 1.8%. Woolworth first half profit rose 28% on higher sales. Westfield earnings rose 11.6%.[/R]

Market Sentiment

ASX 200 index rose 1.8% or 101.1 to close at 5,767.20

The Preliminary market turnover was 1.53 billion worth $7.19 billion, with 653 stocks trading higher, 600 trading lower, and 330 unchanged. The most active stock on the ASE was ABC Learning with 156.96 million shares worth $268.94 million.

Woolworths Limited first-half earnings up 28%

Australia''s biggest retailer, Woolworths Ltd posted first-half net income rise of 28% to $891.3 million in the six months ended Dec. 30 on the back of an 8.6% growth in sales. The profit in the same period in the previous year was $695.6 million. Sales growth in the first half of fiscal 2008 declined to 8.6% from 15.9% in fiscal 2007.

Sales rose to $24 billion from $22.1 billion during the corresponding period last year. Earnings before interest and tax for the retailer were up 20% to $1,379.9 million from $1,145.6 million a year earlier. EBIT growth declined in the first half to 20% from 270% a year ago.

The company''s biggest unit, Australian and New Zealand supermarkets achieved a 19% rise in EBIT to $1.04 billion while revenue gained 7.9% to $20.32 billion. The company opened 19 supermarkets in the first half and plans to open 12 new stores in the second half.

Profit after tax rose 28.1% to $891.3 million compared to 28.1% rise in profit to $695.6 in the previous first half year. Earnings per share jumped 25.9% to 74.06 cents from 58.83 cents a year ago.

Woolworths declared an interim dividend of 44 cents, up from 35 cents in the first half of fiscal 2007. Its share rose 4.2%.

The company now operates 13 stores in India under licensing agreement with Tata Group under the name Croma with total sales of $46 million and a loss of $2.3 million.

The company issued interim dividend of 44 cents keeping its payout ratio of 60%. Return on equity in the first half rose to 14.97% from 13.74% a year ago and return on capital increased to 18.09% from 15.07% a year ago.

The company guided fiscal 2008 profit increase between 19% and 23%.

Gainers and losers

Of the ASX 200 index stocks, Timbercorp Ltd led the gainers with a rise of 18.1% followed by increases in Allco Finance of 9.6%, in ABB Grain Ltd of 9%, in Santos Ltd of 7.5%, and in Gunns Limited of 7.5%.

Of the ASX 200 index stocks, AED Oil Ltd led the decliners with a fall of 9.8% followed by losses in Riversdale Mining of 9%, in QBE Insurance of 5%, in Seven Network of 4.7% and in Centro Retail Group of 4.6%.

NAB to acquire bank in the US Northwest

National Australia Bank Ltd Chief Executive Officer John Stewart today told industry gathering that his bank was considering an acquisition in the U.S. Northwest.NAB stock rose 4.1% after the talks.

Stewart said that they were targeting a bank with a large customer base of farmers that don''t rely on government subsidies.

National Australia has been on the search of new business after a currency trading scandal in 2004 and $2.2 billion in write-downs from the 1998 acquisition of Florida-based mortgage company HomeSide Lending Inc.

Omaha, Nebraska based Great Western Bancorp to target growth in farm lending to tap in the rising global agricultural trade. Great Western was its biggest acquisition since HomeSide.

Westfield 2007 earnings rise 11.6%

The world''s largest shopping mall owner by market value, Westfield Group today announced an 11.6% increase in operational earnings to $1.79 billion for the full year ended 31 December 2007.

The increase represents 96.12 cents per security, an increase of 6.0% on a constant currency basis. During the year, development gains of $1.1 billion were achieved on the Group''s investment of $1.3 billion in completed projects, representing an 87% return on cost. After expenses of $220 million, development segment earnings for the year were $889 million.

The distribution for the year was $1.98 billion, solely from operational segment earnings and income hedging. The distribution represents 106.5 cents per security, which is in line with forecast.

Net income fell to $1.5 billion in the six months ended Dec. 31, from $2.2 billion a year earlier. Second- half earnings were calculated by subtracting first-half profit from the full-year result the Sydney-based company reported today.

Total retail sales for the year increased 5.9% in Australia, 7.9% in New Zealand, 3.1% in the United States portfolio. In the U.K., the retail sales statistics rose 4.3% in the year with comparable sales up 2.2%.

Westfield stock rose 2.2%.

ABC learning calls for trading halt

ABC Learning Centres Ltd whose share is on a free fall today called for a trading halt as it engages suitor''s for some of its business interests.

The halt comes as chief executive Eddy Groves and four other directors had to meet margin call on the stock holding in the company.

Groves sliced his shareholding by 40% after selling 8 million shares for $1.85 a share yesterday, while his wife Le Neve sold 65% of her shareholding after disposing 11 million shares for $1.84 each. The two owned 7.8% of the stock with more than 37 million shares.

ABC hinted that more forced sales might be in the pipeline for more than 96% of the remaining 21.9 million shares that are owned by directors. The shares are equivalent to 4.6% of stock outstanding and are being held in margin lending arrangements. ABC said one director with 695,000 shares had pledged alternative security over their stakes.

ABC''s share fell 43% percent yesterday after a slump in earnings raised concerns it may struggle to repay debt.

Centro in bid to protect management contracts

Centro Properties Group today appealed to its investors in its unlisted property syndicates to reject proposals to replace it as manager of the trusts.

Centro was reacting to a formal approach made by Pelorus Property Group Ltd to the investors with an offer to reduce fees and boost returns. Pelorus wants to assume management of Centro syndicates including MCS 16, which had $36.875 million in assets at June 30 2007, including Centro Toormina in the New South Wales state.

Centro, which is facing an April 30 deadline on $4.9 billion, has been battling to raise funds to offset the debt. Centro''s share gained 6.4% while Pelorus rose 17% after indicating that its first-year profit rose 21% to $3.2 million.

Maryborough to develop hotel, houses and marina

Australian producer and refiner of raw sugar, Maryborough Sugar Factory Ltd today announced that it was seeking approval to develop a hotel, houses and marina on land currently used to grow cane in Queensland.

The development valued at $500 million would be carried out on a 174-hectare (430-acre) cane farm with Mary River frontage near Maryborough, 255 kilometers (158 miles) north of Brisbane.

Chief executive Mike Barry said it would shortly lodge an application to the Maryborough City Council for the approval.

He said the development was consistent with the company''s property portfolio strategy to create value from its investment in real property whilst simultaneously increasing cane supply.

""Maryborough Sugar remains committed to its core business. Over the past twelve months the company has acquired properties totaling 1,014 hectares at a cost of $7.85 million. Fully developed, these properties should produce an additional 42,000 tons of sugar cane annually,"" he said.

Approval for the development, which includes 1,300 houses, a harbor area with a 300- berth marina, hotel and shopping precinct, was expected to take 12 to 24 months. Maryborough Sugar stock rose 7.7%.

Inpex considers Darwin for LNG plant

Inpex Holdings Inc said today it was studying Darwin as a site for a proposed liquefied natural gas project in Australia as opposition to a preferred location a quarter of the distance from the fields threatens to delay the venture.

The company told reporters via e-mail and reported on Bloomberg that the study envisages a two-unit LNG plant in the Northern Territory capital with a capacity of more than 8 million metric tons a year. The company said it would take a decision on the site for the plant later this year.

Environmental groups are opposed to its plans to build the $10 billion LNG plant on the Maret Islands off Australia''s northwest coast to process gas from the Ichthys fields in the Browse Basin.

The project would require an 850-kilometer (528-mile) pipeline to transport Ichthys gas to Darwin as opposed to a 190-kilometer link needed to the Maret Islands which is opposed by the environmental groups.

GrainCorp shares rise to record after clipping of farmers'' powers

GrainCorp Ltd share rose 17% to a record high after farmers lost the power to elect the majority of the board, following a vote by shareholders. Shareholders voted to end the Grain Growers Association Ltd''s right to choose six of the company''s 10 board members during the grain handler''s annual meeting.

The vote paves the way for GrainCorp to receive or make takeover bids. Rival Grain Company, AWB Ltd tried to win the support from its grain-grower shareholders for a similar change two weeks ago but the bid was rejected.