Shares in CIMIC tumbled more than 17 per cent to a two-year low after investors were disappointed by first half results. The construction and mining services contractor booked a net profit attributable to shareholders of $366.7 million for the six months through to June, up 1.1 per cent on $362.8m for the first half last year. That figure was restated due to the adoption of new accounting standards. By 11.20am (AEST), CIMIC shares had dropped 17.7 per cent to $37.73 on downgrades by analysts at Macquarie and Credit Suisse. Still, the company upped its first half dividend to 71 cents a share fully-franked, up from 70c last year, as it reaffirmed its full-year guidance. Earnings before interest and tax was $569m, up from $551.7m last year. CIMIC was upbeat on the outlook for the construction markets in its core markets of Australia, New Zealand and the Asia Pacific, saying all were expected to continue to grow, underpinned by governments and the private sector increasing spending on infrastructure.
Clearview Wealth Ltd (CVW):
ClearView wealth has scrapped its full year dividend, opting instead for a share buyback, as it attempts to recover from a wounding appearance at the banking royal commission. The independent life insurer was forced to shut down its direct life insurance arm, and told shareholders today it was positioning itself to capitalise on the changes in the industry. Ahead of the release of its full year results next month, ClearView said it expected underlying net profit of $25.1 million for the full year, down from $32.4 million in the previous year and suspended its dividend program. “Given the current share price, the Board believes that buying back shares is a better use of shareholder capital than dividends,” it said in a statement. The insurer said it had substantially completed its remediation programs and was transitioning to business as usual functions. ClearView shares were trading flat at 66c on Thursday, a 37 per cent discount to its trading levels before the royal commission.
Domino's Pizza Enterprises Ltd (DMP):
Domino’s positive results in the US look to be rubbing off on the locally listed firm, with Morgan Stanley analysts suggesting some positive read through after the US earnings were reported. Domino’s NYSE listed shares were up 2.62 per cent in last night’s session, and its shares on the ASX were up 2.71 per cent in the second hour of trade to $37.59. US results showed international same store sales growth improved from 1.8pc in the previous quarter to 2.4pc this quarter and the chain opened 331 net new stores in the first half. “We stress that the read through is imperfect, but believe the DPZ result incrementally lowers DMP’s FY19 earnings risk,” equity analyst Peter J Marks said.
Harvey Norman Holdings Limited (HVN):
Greenlit Brands, the retailer whose portfolio of stores includes Freedom Furniture and Fantastic Furniture, Plush, Snooze, Best and Less and Harris Scarfe, has appointed the former boss of Harvey Norman’s operations in Ireland as its new CEO of Freedom. Blaine Callard will join Freedom from next month and brings to the role more than 20 years experience across a range of operational and strategic roles at the Harvey Norman Group, most recently as CEO of Harvey Norman (Ireland) for the past eight years. In this role, he oversaw its successful strategic turnaround with a return to profitability, a strengthening of its gross operating margins and a reinvigoration of its brand in Ireland, Greenlit said today announcing the appointment. Greenlit is part of the troubled Steinhoff International group which almost collapsed under the scandal of an accounting fraud and the Australian offshoot is busy trying to unshackle itself from its strife-ridden parent and chart its own course as an independent company with its own Australian retail chains. Greenlit is run by Michael Ford, the former chief executive of The Good Guys.
Lendlease Group (LLC):
In the largest deal Lendlease has ever struck, the global property player will develop a large swathe of Google-held land in the San Francisco Bay area into much-needed housing, creating real estate worth $21 billion or more. The development agreement, signed overnight in the US, has been two years in the making. As many as 15,000 homes will be built over 10 to 15 years across three districts in the Bay area. "It is a landmark opportunity for Lendlease," the group's chief executive for the Americas, Denis Hickey, told The Australian Financial Review by phone from San Francisco. "It's is the biggest opportunity we've ever had as an organisation. It's a real credit to the fact that Lendease's global expertise is highly valued by the leading companies in the world."
Platinum Asset Management Ltd (PTM):
Offshore focused fund manager Platinum said it took advantage of shares that were sold off on the back of concerns around trade and the Huawei bans. At the same time Platinum added German auto giant BMW to its $454 million Platinum Capital portfolio. New positions were added in Ryanair (European budget airline), Owens Corning (US building materials), and BRF (Brazilian producer of pork and poultry). These new investments and additions to existing positions accounted for over 4 per cent of Platinum Capital, CEO Andrew Clifford said in an update. These purchases were funded by exiting positions in Siemens (German industrial conglomerate), Reliance Industries (Indian Petrochemical and Telecoms) and Equifax (US information solutions), and trimming our holdings across a range of positions such as Schibsted (online classifieds) and Alphabet (owner of Google).
Santos Ltd (STO):
Oil and gas producer Santos is forecasting a further pick-up in production this December half after posting a 32 per cent jump in output to a record in the first half of 2019. Chief executive Kevin Gallagher said production in the second quarter was hit by scheduled maintenance that took place at fields in the Cooper Basin and at the PNG LNG venture in Papua New Guinea. "With this maintenance activity now mostly behind us, we currently expect stronger production in the second half," Mr Gallagher said in a quarterly report on Thursday. Revenues in the June quarter slipped by 5 per cent from the March quarter, however, to $US959 million ($1.37 billion) due to lower average LNG and domestic gas prices and the timing of export shipments. First half revenues rose 18 per cent to $US1.974 billion, also a record.
South32 Ltd (S32):
South32 says it is closing on the sale of its South African thermal coal assets, telling shareholders this morning it is assessing a shortlist of buyers and expects to make a decision before the end of the year. The Perth-based global miner announced a mixed bag of results from its operations this morning, with its South African coal mines underperforming, but its Australian base metals mine and metallurgical coal operations beating expectations. South32 said its Cannington base metals mine in north Queensland had defied the massive floods that shut down the north of the state early this year, beating production guidance despite the impact of the heavy rainfall. Despite flooding causing an extended outage on the rail line connecting Cannington to the Townsville port, the mine upped concentrate shipments in the final quarter to meet and beat its annual budget.
Woodside Petroleum Limited (WPL):
Woodside Petroleum suffered its first drop in revenue in six quarters as it counted the hit from softer pricing and production drops due to unexpected maintenance delays at its Pluto field off Western Australia. In a second quarter production update to the market on Thursday morning, Woodside revealed a 32 per cent drop in revenue, which it blamed largely on the unexpectedly long maintenance works at Pluto. Woodside shares dropped almost 3 per cent after the market opened on Thursday. The company had flagged the problems at Pluto with investors in June together with guidance that the company's full year production would be at the lower end of its 88-94 million barrels of oil equivalent (MMBOE) guidance range.
Woolworths Group Ltd (WOW):
Woolworths has announced the first three Big W stores that will close as part of the company's plan to contain losses from the languishing retail chain. Big W stores in Chullora, Auburn and Fairfield will shut their doors by January 2020 in a move that managing director David Walker said was not taken lightly. "We would like to acknowledge the support of the communities of Chullora, Auburn and Fairfield and the hard work and commitment of our store team members," Mr Walker said. "Over the next six months, we will support our team and explore redeployment opportunities with team members who choose to continue their career at BIG W or with other Woolworths Group brands in the months ahead."
(Source: AIMS)
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