| LEI | Thiess welcomes the announcement by the Federal and NSW State Governments today that the Thiess MacMahon joint venture (TMJV) has been selected as preferred contractor by the NSW Government to upgrade the Pacific Highway between the Frederickton Interchange and Eungai. Thiess is a 60% partner in the joint venture which will design and construct a 26.5km four lane divided carriageway. Thiess Managing Director Bruce Munro says the project is another great roads milestone for Thiess in NSW. “We are currently in an alliance delivering the Hunter Expressway near Newcastle and the Pacific Highway project is perfectly timed to benefit from the expertise gained on that project,” Mr Munro said. “Thiess will celebrate 80 years of road building during the life of this project, an achievement of which all at Thiess are immensely proud.” The contract will be signed in December and while the value is yet to be finalised, it is expected to be in the order of $450 million. | Company report |
| US | Consumer spending over the four-day Thanksgiving weekend climbed 13% to $59.1B, although the growth was slower than the 16% last year. Average spending per customer rose 6.3% to $423. Online sales on Black Friday jumped 26% and topped $1B for the first time, says ComScore, which forecasts that Internet sales over the holiday season will grow 17% to a record $43.4B. | Seeking Alpha |
| Sth America | Argentina is due to appeal today against a U.S. court ruling that it must pay $1.3B to holders of debt that refused to accept haircuts on their paper after the country defaulted on almost $100B of loans in 2001. Complying with the order would force the Argentine government to break its own law and put it at risk of lawsuits from those who accepted its debt restructuring. However, not complying could put the country in technical default. | Seeking Alpha |
| EU | Germany’s Ifo business climate index has unexpectedly increased to 101.4 in November from 100 in October, confounding expectations for a fall to 99.5. However, Ifo Chief Economist Klaus Wohlrabe remains gloomy about the prospects for the German economy, saying that it could even contract in Q4 as companies continue to postpone investment. Meanwhile, French companies are still pretty depressed despite a business confidence index rising to 88 from 85. | Seeking Alpha |
| China | Chinese manufacturing PMI appeared to grow for the first time in 13 months in November, with the HSBC flash reading rising to 50.4 from 49.5 in October. Eurozone PMI has risen to an eight-month high but is still firmly contracting. “The (eurozone) PMI suggests that the (economic) downturn is set to gather pace significantly” in Q4 says Markit, adding that GDP could fall by up to 0.5%. | Seeking Alpha |
| EU | S&P has reiterated France’s AA+ rating and its negative outlook, and warned that the government is likely to miss its 2013 deficit target of 3%, forecasting that the gap is likely to be 3.5%. However, S&P applauded the government’s reform proposals, saying they will “improve the country’s growth potential.” S&P’s action – or lack thereof – follows this week’s downgrade from Moody’s, which is more skeptical about France | Seeking Alpha |
| CSL | CSL Limited revised US Dollar profit outlook for fiscal 2013. The Company now expects net profit after tax to grow by approximately 20% at constant currency, despite competitive business conditions. In August this year the Company reported a net profit after tax of US$1,024m and provided guidance that it expected profit to grow approximately 12% during fiscal 2013. Dr Brian McNamee, CSL’s Managing Director, said “I am pleased to report an improved company outlook for the financial year, largely underpinned by the performance of CSL Behring. A number of factors have contributed including a higher level of sales, a better sales mix and improved efficiencies across the supply chain. Also contributing to the better outlook is higher than anticipated royalty income from sales of GARDASIL.” | Company report |
| EU | Euro zone finance ministersGreece’s international creditors have agreed to a new Greek government debt target of 124% of gross domestic product by 2020, according to reports out late Monday. Euro-zone finance ministers and the International Monetary Fund have agreed on measures that will see Greece’s debt cut by 20% of GDP, according to the reports. Talks between the euro-zone finance ministers, the European Central Bank and the International Monetary Fund took place in Brussels late Monday, and a press conference is set to be held after the talks | Market Watch |
| BKW | Brickworks should deliver a solid performance in the coming year to July 31, 2013, underpinned by expectations for a steady result from the Building Products Group and improved earnings from Land and Development. Chairman Mr Robert Millner said: “Brickworks’ diversified portfolio that includes Building Products, Investments and Property has provided shareholders with returns that have outperformed the All Ordinaries Accumulation Index over the past five, ten and fifteen years.” Earnings in the Building Products Group have now stabilised following 18 months of decline. Despite slightly lower volumes, sales revenue for the first quarter of financial year 2013 was steady compared to the prior corresponding quarter, primarily as a result of solid price increases achieved across most divisions. In addition, the Austral Bricks and Bristile Roofing divisions benefited from significant restructures completed in FY2012 that have enhanced margins. Operations have been significantly disrupted due to two fires, one at Auswest Timbers’ Deanmill site in Western Australia and the other at the Wollert brick factory in Victoria, as well as flooding at the Wetherill Park precast plant in New South Wales. These events are covered by insurance policies and Brickworks expects to fully recover damaged plant and equipment and lost earnings. | Company report |
| MLB | Melbourne IT announced that it is in the process of pursuing possible ownership alternatives for its current portfolio of businesses following a review of its corporate structure. Melbourne IT also has updated its profit guidance based on operating performance to-date in the second half of 2012. Melbourne IT is experiencing disappointing trading results and a number of new opportunities that were expected to come through in the second half of 2012 are delayed and are now not expected to materialise until 2013. Aggressive competitor activity especially on pricing is contributing to declining results in its SMB eBusiness Solutions (SMB) segment. The ForTheRecord (FTR) division has been impacted by significant reductions and ‘holds’ in US Federal and State Government spending. FTR’s profitability is generally determined by a small number of large transactions each year. The Enterprise Services (ES) division is expected to perform better than last year. However, Queensland Government budget cuts and general tightening of business spending are impacting the hosting segment, delaying some anticipated projects. The Digital Brand Services (DBS) division also continues to perform strongly, but the delays in ICANN’s rollout of its new gTLD program and the correlating changes to the new naming system until 2013 have curtailed its growth expectations in 2012 to more modest levels. As a result of this, Melbourne IT’s full year 2012 EBIT is likely to be lower than 2011 EBIT by approximately 10%. This is primarily due to the ongoing volatility in the FTR division. The full year 2012 EBIT from the combined core businesses of DBS, SMB/GPS and ES is expected to be broadly in line with 2011 results. Consolidated net profit after tax will be close to 2011. After the end of the year, the Board will, as part of its standard end of year processes, review the goodwill value of the FTR division and potentially this could lead to an impairment to this value in the final accounts. | Company report |
| China | China Industrial Profits YoY +0.5% (prior -1.8%) | Market Watch |
| FWD | Fleetwood provided its chairman’s address to the company’s AGM. The chairman reported that the company achieved another record result in the year with operating profit after tax of $53.2m. This represents an increase of 4% over the previous year. Group EBIT margin increased from 16.2% in 2011 to 18.8% in 2012, whereas revenue decreased from $466.6m to $407.4m. Strong operating cash flows of $77.3m resulted in a net cash position at year end. Looking ahead, the chairman reported that conditions in nearly all of the company’s key markets have been soft at the start of this financial year. This includes demand for accommodation at Searipple Village, demand for manufactured accommodation for the resources sector, and demand for recreational vehicles. As a result of the soft market conditions, the company expects to report a first half profit this year that is significantly below last year | Morningstar |
| MND | Monadelphous announced that it has been awarded a contract with QGC, valued at more than $80m, to provide maintenance services at its Qld Curtis LNG (QCLNG) plant. The group will provide multidisciplinary core maintenance and shutdown services to support the operations phase of the QCLNG plant, which is under construction at Curtis Island, near Gladstone in Qld. The contract commences in January 2013 for an initial six-and-a-half-year term | Morningstar |
| ALQ | ALS (ALQ) reported NPAT up 32.5% to $135.5m for the half-year ended 30 September 2012. Revenues from ordinary activities were $813.6m, up 21.9% from the same period last year. All testing and inspection services divisions recorded strong increases in revenues and profit contributions compared with the pcp. In particular, significant growth in demand for services in ALS Energy, ALS Life Sciences and ALS Minerals saw these divisions post revenue gains of 28% or more for the half. Basic and Diluted EPS was 37.4 cents compared to 29.5 cents last year. Net operating cash flow was $107.3m compared to $83.0m last year. The interim dividend declared was 21.0 cents compared with 19.0 cents last year | Morningstar |
| GNS | Final bids for Gunns sawmills at Bell Bay and Tarpeena were due overnight, and receiver KordaMetha is said to have at least five bids for the asses which may fetch up to $70m | AFR |
| BPT | Big oil companies have been knocking on Beach Energy’s door as it ramps up preparations for an exploration campaign in Tanzania | The Australian |
| ERA | Energy Resources of Australia has narrowed its full-year production guidance and given some certainty by confirming an expected full-year loss would be limited to between $135m and $155m | The Australian |
| TWE | Treasury Wine Estates is on the acquisition trail for luxury vineyards to fill its stable of premium wines, as it chases better investment returns | SMH |
| FXL | Flexigroup incoming chief executive Tarek Robbiati says international acquisitions are not a priority for him, and continuing to build the local business will be his main concern when he steps into the top job in January | The Australian |
| BEN | A regional financial firm that is the subject of a $290m acquisition by Bendigo and Adelaide Bank was holding capital that was significantly below regulatory guidelines amid heightened concern by investors in country Victoria following the collapse of Banksia Capital | AFR |
| CGF | Challenger announced a $50m investment in the group’s on-market share buyback program over the next six months, after the company reaffirmed its full-year financial guidance at the AGM | AFR |
| EVN | We have had a great first year – here are a few of the many highlights: Meeting our FY2012 production guidance while bringing our overall operating costs in well under guidance – lower our unit costs remains a key focus for Evolution; Achieving a 65% increase in annual production from Pajingo, a tribute to the hard work of Evolution’s Pajingo team and the capital investment we have undertaken; Continuing to improve the plant reliability and mining efficiency at Edna May which resulted in a record production performance in the recent September quarter; A record 32,734 ounces produced at Mt Rawdon in the June quarter; and Achievement of a number of exploration successes across the group including the discovery of the high-grade Coronation Structure near current workings at Cracow, and extensions to mineralisation at the Greenfinch prospect at Edna May and the Moonlight prospect at Pajingo. | Company report |
| GOZ | Growthpoint Properties Australia enjoyed a successful FY2012 with growth in the property assets of the Group, distributions to security holders and strong financial returns. Distributable income of $57.7 million, or 17.7 cents per security was 58.5% greater than FY2011. Security holders were paid a distribution of 17.6 cents per security, above guidance and approximately 2.9% above FY2011. Significantly, the Group’s assets have increased to over $1.6 billion, with the acquisition of 6 assets for $346.2 million. GOZ’s market capitalisation, or value on the ASX, now approximates $830 million. Directors and management have been vigilant in growing the business to maintain a quality property portfolio, with modern properties, leased long term to quality tenants with a rising rental income. As at 30 June 2012, the property portfolio enjoyed a weighted average lease expiry (WALE) of 7.2 years, a high occupancy rate of 99.1%, a weighted average rent review (WARR) of 3.2% per annum and a weighted average capitalisation rate (WACR) of 8.3%. Growthpoint’s capital management program has seen in excess of $640 million of equity raised since FY2009, funding the expansion of the Group. Australian banks have supported the Group’s growth and we took the opportunity to tranche the Group’s main $835 million syndicated debt facility, extend the term and enter a new bilateral debt facility in FY2012. Post year end, debt was increased by $60 million and now totals $895 million, with an average duration of 3.2 years, with no debt maturing until December 2014. During the financial year, the Group has lowered its average cost of debt from 7.70% on 30 June 2011 to 7.25% at 30 June 2012. Since year end the cost of debt has continued to fall and is 6.99% as at 31 October 2012. We have also extended the interest rate hedging profile with 94% of the Group’s debt hedged for an average 4.4 years from 30 June 2012. Further, a higher ASX price combined with the lower cost of debt has resulted in a lower cost of capital than previously. GOZ has produced attractive and consistent returns for the last 3 years and enjoys a generous distribution yield at current trading levels 8.5% versus the sector average of 5.8%. The ASX price has been consistently trading above the Net Tangible Asset value per security since the start of this calendar year. The outlook for the Group is positive and EPS and DPS guidance previously provided to the market is reconfirmed. Directors and management believe that investment in modern, well located office and industrial property with quality corporate and government tenants in Australia is a sound investment. GOZ’s portfolio exemplifies these characteristics. A key feature of the Group is the quality of its tenancy base; our top ten tenants are all “blue chip” corporate and government tenants. You will note from the slide on screen that there is limited lease expiry risk within the portfolio in the near term. As at 30 June 2012, 1% of the portfolio is vacant, 1% of income expires in FY2013 and 8% in 2014. Executive Management enjoy excellent relationships with tenants of the Group and we seek to renew leases prior to their expiry. GOZ has been diversifying into office markets around the country and the portfolio is evenly weighted between office (49% by value) and industrial properties (51% by value). In particular, we have increased our weighting to Queensland, which we believe has a well diversified economy backed by the mining and resources sector. State growth has been relatively strong. We have reviewed New South Wales and Western Australia carefully, with an aim of additional investment if opportunities arise. Retail property investment opportunities have been reviewed periodically; however, our pricing for some assets has been lower than that expected by vendors. We have been cautious about significant investment at the time of a changing retail landscape and poorer consumer confidence and spending. Our near term focus remains on office and industrial property markets. The Group continued to invest into the office market during FY2012. The main acquisitions are highlighted in the slide. In summary, we have purchased modern properties, with high occupancy and a medium term WALE at yields approximating 8% to 10%. The 333 Ann Street, Brisbane and 10-12 Mort Street, Canberra properties are well located within significant CBD office markets. The Board has determined that acquisition of assets through development fund-throughs is a sound strategy where development risks to the Group are minimised. Pre-commitments to quality tenants, experienced developers and quality builders are prerequisites to investment. We are pleased to announce that practical completion of the Energex, Nundah project was achieved on 14 November 2012 and that the Fox Sports, Artarmon project has progressed well with completion expected mid December 2012. | Company report |
| HVN | Harvey Norman chairman Gerry Harvey is expecting Christmas sales to be up on last year, especially if we have a hot summer. Mr Harvey told reporters after Harvey Norman’s annual general meeting in Sydney on Tuesday that he thought December sales would improve on the same month in 2011 despite October and November sales being lower than he expected. But he said the weather would still play a part in the success of the electrical, furniture and bedding retailer’s Christmas sales. | iress |
| IFL | IOOF has performed positively in 2012 in light of difficult external conditions. Financially, your company has performed well, reporting a $19.4 million statutory profit and an underlying Net Profit After Tax and Pre Amortisation result of $96.4 million for the period ended 30 June 2012. Much time and energy has been spent during the year, growing the business both organically and through acquisition. This focus has yielded pleasing results, with the execution of two strategic acquisitions, the addition of more aligned advisers and the nvestment in the IOOF brand through a carefully targeted advertising campaign. Despite the challenging conditions, the amount of money we manage on behalf of others increased by $1.1 billion to $107.3 billion as at 30 June 2012.A key contributor to this result relates to the extra funds brought into the group as part of the DKN acquisition in late 2011. Offsetting this amount was a decrease in the market value of client’s total funds as well as some institutional outflows in IOOF’s funds management business Perennial. One area I would also like to highlight is that for yet another year, the growth in our Flagship platforms is ahead of that of the industry. Where the industry’s annualised industry growth only increased by 1%, IOOF’s flagship platforms netflows have grown by 5%. Pleasingly, since the end of the financial year and for the quarter ended September 2012, client monies have increased to $110.7 billion. | |
| US | The Federal Reserve Bank of Chicago said its National Activity Index’s three-month moving average dropped to – 0.56 in October from -0.36 in September. The last time the three-month average was this low was November 2009, as the US was clawing back from the recession. | Morningstar |
| US | Business activity among Texas-area manufacturers fell back into contraction this month, according to a report released Monday by the Federal Reserve Bank of Dallas. The bank said its general business activity index dropped to -2.8 from 1.8 in October | Morningstar |
| LEI | Leighton Holdingsreported JV partners Leighton Properties and Grosvenor have sold Eclipse Tower to Retail Employees Superannuation Trust for $167.5m. Built by John Holland, construction was finished in August 2012. At over 80% leased, the final three vacant floors in the building are currently under offer. | Morningstar |
| LLC | Lend Lease announced that Baulderstone, part of its construction and infrastructure business in Australia, has been awarded a circa A$140m contract by Cbus Property to build Melbourne’s new City West Police Complex. This contract will involve the design and construction of nine floors of contemporary office space for Victoria Police’s major criminal investigation teams, a purpose-built police station as well as parking facilities for 300 vehicles. Demolition of the existing buildings is currently underway and project completion is scheduled for March 2015 | Morningstar |
| SYD | Sydney Airport has raised A$1.1bn of new senior debt facilities which has addressed all 2013 debt maturities and provided additional liquidity to extend funding of the forecast capital expenditure programme. As part of the refinancing process, each of the three ratings agencies has reaffirmed Sydney Airport’s BBB or equivalent credit rating | Morningstar |
| RED | The Annual Report and the Activities Report for the three months to 30 September 2012 noted challenges which were predominantly related to operations in the pit and in particular, the removal of a significant volume of silt. The removal of this material which in places was ten metres thick and to which I have previously labelled as akin to sloppy porridge, took over four months. The volume of silt was underestimated. Hard rock causeways had to be developed within the pit to provide heavy excavation equipment with safe working platforms. The characteristics of the material coupled with the poor mobile plant equipment availability from the contractor, dominated activities in the mine. The fluid nature of the material also resulted in spillage from the trucks en route to the waste dump requiring more frequent clean-up of the ramps and haul road. During this period various mining consultants opined on the practices employed with suggestions adopted as appropriate. With no access to the pit floor only minor tonnages of ore were available from upper pit benches. Once the silt was largely removed,material from the causeways was then excavated together with debris that was sitting below the silt. | Company report |
| RSG | FY2013 guidance of 415,000oz at A$830/oz. Outstanding first quarter – 115,544oz at $705/oz. Dividend of $31 million paid to shareholders. Syama expansion underway – FY2014. Golden Pride closure – Nyakafuru assessment. Strategic investment in Noble Mineral Resources | Company report |
| REX | Rex Group was not only able to substantially improve on its prior financial year’s financial performance, it managed to post a record profit despite difficult operating conditions and spiralling fuel prices. The record profit before tax is on the back of higher passenger revenue from Rex RPT operations, turnaround in its subsidiary Pel-Air’s performance, higher enrolment of trainee pilots at AAPA and continuous cost reduction programmes. In the past financial year, Pel-Air had new income stream from the Ambulance Victoria contract, saw improved demand for charter services whilst its freight and defence business remained strong. With world-wide demand for new pilots estimated at 20,000 a year, we believe that AAPA is well positioned to contribute strong earning streams to the Rex group in the coming years. | Company report |
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