David Jones sales up in first quarter, Twitter considers new capital raising: Economy Roundup

Retail giant David Jones has recorded a 3.2% increase in first-quarter sales on a statutory basis, with like-for-like sales up from $452.1 million to $466.6 million in the three months to October 30.

The company said the result comes even though spending remains “conservative”, and warns that spending will remain subdued over the year.

“Given consumers remain conservative in their spending, it is too early for us to provide any guidance update until after we have traded through the all-important second quarter, which is the key component of our company’s first half profit,” chief executive Paul Zahra said in a statement.

However, the company forecasts profit growth after tax for the 2011 financial year of between 5-10%. Zahra also said the completion of the Bourke Street store will occur in the second quarter, meaning all CBD stores will be opening without interruption.

“For the first time in many years all of our CBD flagship stores are now trading uninterrupted by disruption. This holds us in good stead in the lead up to the all-important Christmas trading period,” he said.

Qantas has announced the world’s fleet of Airbus A380 aircraft will need to replace 40 Rolls-Royce engines to ensure their safety.

“We’ve been talking to Airbus and Rolls-Royce and we understand that the number (of engines to be replaced) is around 40,” Qantas chief executive Alan Joyce told reporters this morning. “We’ve already replaced three and there could be more.”

Joyce also said the company will need to keep its fleet grounded for now.

The decision comes after a Qantas A380 with over 450 people on board made an emergency landing in Singapore after one of the Rolls-Royce engines exploded in-flight.

Meanwhile, the Australian Competition and Consumer Commission has rejected a proposal from Metcash to buy the Franklins supermarket chain for $215 million.

The corporate regulator said the purchase would lessen competition.

“Our thorough review found that the proposed acquisition would have reduced the number of players competing to provide these services from two to one, effectively giving Metcash a monopoly on grocery wholesaling to independent supermarkets in NSW,” chairman Graeme Samuel said in a statement.

“Barriers to entry in this market are already high, making timely new entry of a competitor to Metcash unlikely if this transaction proceeds.”

The ACCC also assessed whether the acquisition would have additional anticompetitive effects for local retail markets, and said that it is aware that other parties have expressed strong interest in the Franklins business.

Shares flat after weak Wall Street lead

The Australian sharemarket has opened flat this morning following a weak lead on Wall Street where investors remain nervous over discussions regarding Ireland’s debt issues.

The benchmark S&P/ASX200 index was up two points or 0.05% to 4626.7 at 12.20 AEST, while the Australian dollar opened slightly higher at just under US98c.

ANZ shares lost 0.3% to $22.75 as Commonwealth Bank shares lost 0.7% to $49.53. NAB fell 0.2% to $24.39 as AMP gained 0.2% to $5.17.

Independent directors of AXA Asia Pacific Holdings have recommended the offer from AXA SA and AMP valued at $13.3 billion.

“Consequently, AXA APH’s independent directors now unanimously recommend the proposal, subject to no superior proposal being made and to the review of an independent expert,” AXA APH said in a statement.

In a separate statement, AMP welcomed the decision and said the deal should go ahead as planned.

“This is a unique opportunity to deliver greater value for both sets of shareholders, while maintaining financial discipline and providing the opportunity for shareholders to participate in the ongoing earnings of a stronger and more competitive group,” chairman Peter Mason said in the statement.

News Corp is close to revealing a new publication designed specifically for tablet computers, James Murdoch has said.

“It’s a tablet-only product and it’s very exciting,” said at an investor conference in Spain. “You’ll hear more about that soon.”

Twitter planning new capital raising

Social network Twitter is considering a new capital raising that would value the company at $US3 billion, TechCrunch is reporting.

It is understood DST Global, the Russian tech firm which has also invested in Facebook, is looking to provide the amount, which would be higher than the $US100 million the company raised last year.

The company raised $100 million from companies including Insight Venture Partners, Spark Capital and T. Rowe Price. DST already invests in Facebook, Groupon and Zynga.

Meanwhile, a team made up of European officials and IMF representatives are now travelling to Ireland to determine if the country’s debt problems can be fixed.

“What we want to concentrate on now is in a focused way, over coming days, to sit down and see in what way can assistance be provided to ensure that these issues can be dealt with properly and appropriately,” Irish prime minister Brian Cowen told Parliament.

“There has been no question of the government … (being) in a negotiation for a bailout,” he said, dismissing the term as pejorative to hoots of opposition derision.

The discussions have kept world markets nervous, with the Dow Jones Industrial Average down 15 points or 0.14% to 11,007.88.