Solomon Lew warns retail conditions uncertain, Optus revenue up: Economy Roundup

Premier Investments, which acquired clothing retailer Just Group during the start of the year, has announced a profit rise of 98% to $82.7 million during the 2009 financial year, compared to last year’s result of just $41.8 million.

However, the company says it remains cautious about the outlook for the industry, with chairman Solomon Lew saying in a statement that the business is hesitant about improvements in consumer confidence.

“It is our view that retail conditions will continue to be uncertain with the possibility of increased unemployment, potential increases in interest rates and potential risks associated with housing valuations which would pose real challenges for consumers.”

Meanwhile, Babcock & Brown Infrastructure Group has said it will continue to examine whether a proposal from the Royal Bank of Scotland regarding refinancing is preferable to an earlier deal from an investor.

The RBS proposal contains $600 million in convertible and redeemable bonds, a new $350 million corporate debt facility and $400 million in new equity.

However, the company said in a statement to the ASX that it will continue to determine “whether a proposal that defers BBI’s financial pressures but does not fundamentally address them, is in the best interests of BBI security holders”.

The company also said it was uncertain whether the plan could be rolled out “legally and commercially”.

Cabcharge defends itself in court, shares remain flat

The country’s largest taxi fare payment processor, Cabcharge, has denied it has abused its power as it continues to defend legal proceedings initiated by the Australian Competition and Consumer Commission.

The ACCC alleged earlier this year that the company refused to enter agreements with competing suppliers that it would allow its own payment methods to be used with alternative EFTPOS terminals. The ACCC also alleged that the company used its market power for anti-competitive purposes by supplying taxi meters and fare schedule updates free of charge or below cost.

However, according to documents obtained by Fairfax, Cabcharge admitted that some free updates were given but were not part of a wider anti-competitive tactic.

The Australian share market has opened flat again today after disappointing results on Wall Street overnight, where energy and materials stocks fell.

The benchmark S&P/ASX200 index was down by 5.1 points or 0.11% to 4672.3 points at 12.00 AEST. The Australian dollar moved up slightly to US86c.

NAB shares rose 0.4% to $29.66, while ANZ shares lost 0.1% to $23.13. Westpac gained 0.2% to $24.93 as Commonwealth Bank gained 0.1% to $48.93.

Singtel forecasts growth for Optus

Singapore Telecommunications has forecast low single-digit revenue growth for its Optus subsidiary next year, along with low single-digit growth for earnings before interest, taxes, depreciation and amortisation.

Optus’ revenue gained 12% during the June quarter to $2.2 billion, while earnings before interest, tax, depreciation and amortisation also grew by 2% to $505 million.

Meanwhile, United Group has announced it will post a loss on its Outer Suburban and Hunter Railcar contracts after a legal dispute with RailCorp did not end successfully.

“UGL was not successful in its entire claim and will record a loss on the OSCar and Hunter Railcar contracts,” UGL said in a statement. However, the company said a positive cash input is still expected during the 2010 financial year, while it also reaffirmed its 2010 earnings guidance.

“Taking into account the combination of recent contract wins, strong trading conditions and a number of steps to mitigate this outcome, UGL expects to maintain its previously stated earnings guidance for FY2010 with earnings significantly weighted to the second half of the year,” it said.

Swan echoes call for stimulus, Wall Street falls

Treasurer Wayne Swan has echoed Prime Minister Kevin Rudd’s warnings from New York about maintaining fiscal stimulus through a global economic recovery.

“It was the putting in place of economic stimulus in countries around the G20, the various financial interventions in other countries when it came to their financial system, that have averted a very substantial economic event in the world economy,” he said today, ahead of a flight to Pittsburg in the US for the G20 summit.

“That’s why it’s important through this meeting in Pittsburgh that global leaders maintain their support for economic stimulus and also have a very important discussion about that nature of global growth as we move forward to recovery.”

In the US, Wall Street fell as oil and commodity price drops delivered a blow to energy and materials stocks. The Dow Jones Industrial Average fell 41.34 points or 0.42% to 9778.86.