No decision on DFO’s future, General Motors files for IPO: Economy Roundup

Discussions between DFO owner and Austexx are ongoing, with still no final decision made regarding the shopping chain’s future.

Fairfax has reported that an initial draft refinancing agreement has been made, but no deal was confirmed by this morning’s deadline. It is understood this proposed deal will provide finance to complete with the South Wharf complex, but would not pay off its debt.

Although a decision is expected soon enough, no announcement has been made so far this morning and deadlines have come and gone.

The situation was made even more complicated yesterday after Australian Competition and Consumer Commissioner Graeme Samuel, who is an investor in Austexx, stepped down from discussions regarding NAB’s bid for AXA Asia Pacific.

Meanwhile, Wesfarmers has recorded net profit after tax of $1.57 billion for the year ending 30 June, up from $1.52 billion last year, with revenue up 2% to $51.83 billion.

Earnings from the Coles division rose by 15.8% to $962 million, from $831 million in 2009. The company said this turnaround was “encouraging”, but also said trading will continue to be volatile over the rest of the year.

“Trading is expected to continue to be challenging in the first half of the 2011 financial year, in particular within the group’s non-food retail businesses,” Wesfarmers said in a statement.

EBIT from the Bunning’s division also rose by 10.5% to $728 million, with EBIT form Officeworks up 13.8% to $74 million. Target recorded an EBIT increase of 6.7% to $381 million.

AMP has recorded a 4.4% increase in first-half underlying profit to $383 million for the six months to 30 June, and says it remains cautious about the economic environment for the rest of the year.

“We’ll continue to act proactively and decisively to reposition the company for growth, capturing the opportunities that will flow from the changing wealth management market and our targeted expansion into Asia,” chief executive Craig Dunn said in a statement.

“We do expect market volatility to continue along with subdued investment sentiment on the retail level.”

QBE Insurance has posted a net profit of $US440 million for the six months to 30 June, with gross written premiums up 20% to $US6.86 billion. Insurance profit also increased by 8% to $US822 million, while revenue was up 17% to $US7.08 billion.

“We are very pleased with the growth and insurance profitability of our businesses around the world and our continued outperformance against the majority of our peers,” chief executive Frank O’Halloran said in a statement.

“Unfortunately, the increase in insurance profit was more than offset by the significantly lower investment returns from volatile fixed interest and equity markets.”

Shares flat after weak Wall Street lead

The Australian sharemarket has opened slightly higher following a flat lead from Wall Street, where investors are still wary regarding the sluggish economic recovery.

The benchmark S&P/ASX200 index was down 0.11% or 4.8 points to 4470.1 at 12.25 AEST, while the Australian dollar fell to US89c after Moody’s said it would review the credit rating of mining giant BHP after it bid for the Canadian Potash group.

However, this morning The Australian has reported several shareholders in Potash believe the $US130-per-share offer is just a starting point and negotiations will continue.

AMP shares fell 4.1% to $5.10, while Commonwealth Bank shares lost 0.5% to $50.41. Westpac lost 0.4% to $22.96 as Wesfarmers lost 1.3% to $31.38.

Meanwhile, Pallets supplier Brambles has recorded a net profit decrease of 0.84% to $US448.8 million, with underlying profit down 19% to $US733.4 million.

“Brambles delivered a six per cent increase in second-half sales revenue compared with the same period in the 2009 financial year,” chief executive Tom Gorman said in a statement.

“Brambles is in robust financial shape and is well-placed to build on its global footprint and strong underlying business to generate growth in sales revenue and profit.”

Healthscope has recorded a 37% increase in annual profit to $99.2 million, with revenue up 11.5% to $1.844 billion.

“The health care reforms proposed by the Federal government primarily impact the public health system and are not expected to change the strong industry fundamentals driving the demand for private hospital services,” the company said.

“The positive momentum evident in the first half continued into the second half of FY 2010, with all of our businesses delivering strong results for the year,” chief executive Bruce Dixon said in a statement.

GM files for IPO

General Motors has filed for an initial public offering, with investors now pleased the company is well on the way to repaying the Government for the loan it received to continue trading.

The company will be listed on the New York Stock Exchange, and the Toronto Stock Exchange. Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citigroup have been selected as the lead underwriters.

Although the company has filed up for an IPO worth up to $US100 million, sources have told Reuters that amount does not represent the full amount the company hopes to raise.

In New York, investors are still wary of the economic recovery despite a number of solid results, including higher sales at retail giant Target. The Dow Jones Industrial Average gained 9.69 points or 0.09% to 10,415.54.