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AUSTRALIA MARKETS(2018-12-07)

AIMS
2018-12-07 14:06

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AMP Limited (AMP):
Newly installed AMP chief executive Francesco De Ferrari has stressed the need for “failsafes” to manage conflicts of interest at -financial advice and wealth companies, as he made a key hire to help drive change at the beleaguered group. While he is still formulating AMP’s strategy, Mr De Ferrari has started to put his stamp on the $7.1 billion company by hiring former Credit Suisse colleague Alex Wade to lead advice. In his first round of interviews, Mr De Ferrari told The Australian he was closely examining AMP’s incentive and pay structures as he built a plan to resurrect the 169-year-old company.
 
Asaleo Care Ltd (AHY):

Personal care and hygiene company Asaleo Care has sold its Australian tissue business, including Sorbent, Handee Ultra and Deeko brands, to Solaris Paper for $180 million. The announcement comes after Asaleo warned in August it was facing a challenging year due to higher pulp prices and energy costs as well as lower sales volumes, as it delivered sharply lower first-half results. The divestment of the Australian tissue business, which is likely to be completed in the first quarter of 2019, is expected to improve the company’s full year earnings margin and significantly strengthen the company’s balance sheet. It follows a strategic review of the company. “The objectives of the strategic review were firstly, to drive profitable growth through our brands by being more consumer and customer focused and second, to build a resilient business model that delivers sustainable, long-term growth,” chief executive Sid Takla said in a statement to the market this morning.
 
Bank of Queensland Limited (BOQ):
The Bank of Queensland has lost its second senior executive in as many days, with group executive of BoQ business Brendan White resigning to become chief executive of Cash Converters. Mr White’s departure follows yesterday’s resignation of BoQ chief executive Jon Sutton, who is leaving the lender to focus on his long-term health following a triple bypass surgery earlier this year. “I know that I will be leaving BoQ business in great shape, and look forward to taking on fresh challenges in my new role,” Mr White said. White’s announced move came just a day after Jon Sutton took the market by surprise by quitting as BoQ chief executive for health reasons, although the timing was said to be pure coincidence. White was presumably negotiating his deal at Cash Converters for a while, so his departure must be more than a recognition that he wasn’t going to get the top job at Bank of Queensland. Grimshaw, now Cash Converters’ chairman, hired White from the Commonwealth Bank when he was BoQ boss, before leaving for the payday lender’s parent company EZCorp in 2015. White starts his new job with a $1.3 million sign-on, with base pay of $720,000 plus up to $900,000 in short and long term incentives which come in part in Cash Converters shares. The incentive then is to boost the stock price to maximise his own earnings.
 
Fonterra Shareholders' Fund (FSF):
New Zealand dairy giant Fonterra has confirmed that it is considering a sale of its Tip Top ice cream brand as it revises it’s farmgate milk price range. The Australian‘s DataRoom revealed the New Zealand iconic ice cream brand Tip Top was for sale on November 18 as it also exclusively revealed the stake in its Chinese investment Beingmate was for sale. Fonterra plans to go to full ownership of its Darnum, Victoria, milk powder facility, jointly owned with China’s Beingmate. First New Zealand Capital is handling the potential sale of Tip Top. Fonterra said its 2018- 2019 forecast Farmgate Milk Price range has been revised from $NZ6.25$6.50 per kilogram milk solid to $NZ6.00-$6.30 per kgMS as it shared an update on its first quarter business performance today.
 
Freedom Insurance Group Ltd (FIG):
Freedom Insurance Group has ballparked its remediation bill at $4 million, and vowed to cease the sale of its direct life insurance products but warned of a liquity shortfall next year. In a review prompted by its appearance at Hayne’s royal commission, Freedom said there was no commercially viable option to recommence the sale of its life products, but would continue to assess alternative models. Those products are what got the insurer into trouble when it appeared at Round 6 of the public hearings, and today it estimated an initial remediation bill at between $3 million and $4 million. Adding to that, it said they were working to cut costs to prevent a liquidity shortfall. “The company may face a liquidity shortfall during calendar year 2019 arising from the timing of payments of commission clawbacks in the absence of receipts of commissions from new business sales. In this regard, the company is considering alternate options to address the potential shortfall,” it said. Further, Freedom said its board remains satisfied that the company is solvent.
 
Graincorp Ltd (GNC):

Well-known businessman John Wylie has reportedly lobbed a rival offer to restructure GrainCorp adding a new complexity to the company’s takeover offer from Long Term Asset Partners revealed on Monday. According to reports, Mr Wylie send a restructuring proposal to GrainCorp chair Graham Bradley yesterday, revealing his own Tanarra Capital was a shareholder.
 
Macquarie Media Ltd (MRN):
Macquarie Media shares jumped more than 12 per cent yesterday after Nine Entertainment confirmed it was looking to mop up the shareholding of the radio company, home of 2GB’s top radio stars Alan Jones and Ray Hadley. Nine will own a 54.5 per cent stake in ASX-listed Macquarie Media after its $4 billion merger with Fairfax Media wraps up on Friday but that leaves the remaining 45.5 per cent up for grabs. Top advertising boss John Singleton is Macquarie Media’s second biggest shareholder with 32 per cent.  The remaining balance is owned by minority shareholders, which include Wilson Asset Management with 2.91 per cent and Jones’s Hadiac with 1.27 per cent.
 
National Australia Bank Ltd(NAB):
The bank accounts of the former chief of staff to NAB boss Andrew Thorburn have been frozen by the NSW crime commission as police now investigate over $110 million worth in corporate travel provided to the bank as part of a bribery investigation. The action by the NSW Crime Commission comes as the investigation into the kickback scandal at the heart of the NAB focuses on what can now be revealed as $113m worth of corporate travel organised by the corporate services company The Human Group. Rosemary Rogers, the former chief of staff to three NAB chief executives including Andrew Thorburn, has been under investigation by NSW Financial Crime Squad over services provided by The Human Group over a ten-year period to the NAB.
 
Westfield Group (WDC):
Westfield’s key malls had become so big they had lost “rental tension” with their new owner no longer on the expansion trail, it was revealed in a UBS research note after the investment bank hosted Unibail-Rodamco-Westfield’s chief financial officer at its global conference. Westfield, taken over by French giant Unibail Rodamco in a $33 billion deal earlier this year, its spin-off Scentre Group and more recently Vicinity Centres pursue the flagship or destination mall strategy, which has seen their shopping centres regularly expanded to dominate their locations. But URW chief financial officer Jaap Tonckens told UBS the newly merged group would focus on refurbishment rather than enlarging the footprint of some of the centres, which are already among the biggest in the world.
(Source: AIMS)
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