Effects test “on hold” in competition review; Oroton bags a 16% jump in profit: Midday Roundup

An effects test will not feature in the draft recommendations of the federal government’s “root and branch” competition review, according to a Fairfax report this morning.

The potential introduction of an effects test has support in the small business community, but has come under attack from the big end of town.

According to Fairfax, government sources say no single economic sector or industry will be singled out as a clear winner from the first recommendations to come out of Professor Ian Harper’s review.

However, the recommendations are expected to include options for encouraging more competition in sectors such as health and education which have traditionally been dominated by the public sector.

Oroton bags a 16% jump in profit

Australian luxury fashion retailer Oroton recorded a 16% jump in net profit after tax for the 2013-14 financial year, jumping from $7.1 million in 2012-13 to $8.3 million.

The Oroton Group, which also counts the distribution of the Gap brand and menswear label Brooks Brothers under its umbrella, posted total revenue of $124.9m, up 26% from the previous financial year.

The recently repositioned Oroton brand led the Oroton Group, with sales up 8% for the period.

The company showed strength in its first year trading since the loss of its Ralph Lauren brand, which it had held the licence in Australia for two decades.

“FY14 was the beginning of a period of transformational investment for the Group as we completed our first year of the post Ralph Lauren era,” said Oroton Group chief executive Mark Newman.

“FY15 will be a year of transformation for the Oroton brand as we focus on building a true attainable luxury positioning, with reduced discounting and focus on quality margin generation.”

Shares up on open

Despite gains in the opening hour of trade this morning, the local sharemarket has lost its early momentum as the morning progresses.

CMC Markets trader Niall King said US markets provided some early “positive vibes” for local investors, along with the banking sector.

“In a role reversal from yesterday, it’s our big four banks that led the way early on while our miners stumbled,” said King.

“Westpac has been the pick of the banks with grains of around 0.7% while elsewhere, Fortescue and Newcrest are both in the red following overnight falls in the prices of iron ore and gold respectively.”

The S&P/ASX200 benchmark was down 5.6 points at 11.27am AEST. On Wednesday, the Dow Jones closed 24.88 points higher, up 0.15% to 17156.8 points.