Westfield records 2% growth in retail sales: Economy Roundup

Property giant Westfield has recorded 2% growth in retail sales in the quarter ending March 31, compared to the previous corresponding period.

“We saw continued strong results from the Australian portfolio and now we are seeing improving conditions, particularly in retail sales performance in the United States and United Kingdom,” co-managing director Steven Lowy said at a press conference.

The company expects to begin $800 million of development projects in Australia as conditions improve, and after 2010, expects to commence between $500 million to $1 billion of developments every year.

As the market conditions improve, Westfield expects to start about $800 million of development projects in Australia and $US200 million in the United States.

After 2010, Westfield said it planned to commence between $500 million to $1 billion of development projects every year.

“We believe at this point of cycle, the returns in Australia are better than the ones we can generate out of [the US] at the moment,” Lowy said.

Peabody Energy has requested more information from Macarthur Coal after conducting due diligence on the miner, as part of the company’s $US3.8 billion acquisition offer.

Macarthur has told the Australian Securities Exchange that Peabody has completed its review of all the initial materials provided, and has advised the company on a number of matters.

“[Peabody is] continuing to work through the impact of the recently released Henry Tax Review on its proposal dated April 15, 2010, including the proposed introduction of the Resources Super Profits Tax,” the company said.

“The Macarthur board recognises that both the outstanding due diligence items and the absence of further guidance on the impact of the recently proposed tax changes provide an environment of uncertainty for Macarthur shareholders,” Macarthur said.

Lihir Gold will recommend a $9.5 billion takeover deal from Newcrest Mining, the company has announced, with shares to be valued at $4.03.

Newcrest will acquire all of Lihir’s shares, with the maximum shares and maximum cash alternatives to be subject to a maximum total share consideration of 280 million Newcrest shares and a maximum cash consideration of $1 billion.

“The portfolio of high quality operating mines and exciting growth opportunities will deliver long-term, sustainable production growth within the lowest cost quartile of the global industry for at least the next 30 years,” Newcrest managing director and chief executive Ian Smith said in a statement.

“Our shareholders will receive a highly attractive premium and, by receiving Newcrest shares, will participate in the benefits created by the combination of the two companies,” Lihir chairman Ross Garnaut said.

Clive Peeters forecasts $4.5 million loss

Electronics and white goods retailer Clive Peeters forecasts a $4.5 million loss for the three months ending March 31, representing an increase of 65% from the previous corresponding period.

In a statement to the Australian Securities Exchange, the retail giant said sales have continued to fall and that the April loss is expected to become worse.

“The combination of very subdued sales and margin pressures will materially impact the trading outlook of the company over H2 2010, despite the company’s successful cost reduction program which it implemented over FY 2009 and has maintained over FY 2010 to date,” Clive Peeters managing director Greg Smith said in the statement.

However, the company has said a recovering retail environment will see sales return to normal during the next 12 months.

“The reports of a strengthening housing market, an improving unemployment trend and forecast economic growth all provide some grounds for Clive Peeters Limited optimism for FY 2011.”

Shares flat

The Australian sharemarket has opened flat today, following stronger leads from Wall Street and the commodity markets, but has since dropped during morning trade.

The benchmark S&P/ASX200 index was down by 7 points or 0.15% to 4778.2 at 12.10 AEST, while the Australian dollar also remained flat at US92c.

ANZ shares have gained 0.4% to $24.83, while Commonwealth Bank shares have risen 0.5% to $59.20. Westpac shares gained 0.7% to $27.74 as NAB also rose 0.7% to $28.10.

As reported by the Wall Street Journal, AMP has applied for clearance from the New Zealand Commerce Commission to acquire the ANZ assets of AXA Asia Pacific Holdings.

It comes after the Australian Competition and Consumer Commission approved AMP’s $12.85 billion bid, while blocking a rival $14 billion bid from NAB.

“In the event any new proposal is received from AMP (or anyone else), the independent directors will consider it on its merits subject to the legal restrictions under the current agreement with NAB and AXA SA,” AXA said in a statement after the ACCC ruling.

Swan says Government focused on surplus

Treasurer Wayne Swan has said the Federal Government is focused on returning the budget to surplus as soon as possible, telling the Australian Business Economists breakfast that there is still a drag on Government revenue.

“We are absolutely intent on returning the budget to surplus,” he said. “There are accumulated losses in the system that act as a drag on the return of those revenues as the economy recovers,” he said.

Overseas, United Airlines parent UAL Corp will purchase Continental Airlines for $3.45 billion in order to form the world’s largest airline, with both entities saying they can better withstand industry pressures when working together.

The new entity will carry the United Airlines brand and turnover $US29 billion in annual revenue, with “cost benefits” expected to follow in 2013.

On Wall Street, stocks enjoyed another day of positive gains with investors gaining confidence due to better-than-expected auto sales. The Dow Jones Industrial Average gained 143.22 points or 1.3% to 11,151.83.