David Jones sales down 0.2% in first half: Midday Roundup

Department store giant David Jones recorded a 0.2% drop in sales to $1.08 billion for the first half of the financial year, with the company saying natural disasters and cooler weather have hurt consumer sentiment.

The retailer said total and like-for-like sales revenue fell by 2.7% to $617.6 million for the second quarter of the year.

Chief executive Paul Zahra said while sales were down profit is expected to be up between 5-10%.

“We experienced a challenging second quarter with wetter and cooler weather, a decline in consumer sentiment, significant discounting in the sector in the lead-up to Christmas and the impact of the Queensland floods on six of our stores,” he says.

“Consumer shopping behaviour continued to be patchy throughout 2G11 and we have seen no material signs that this is changing.”

Glenn Stevens warns on length of mining boom

RBA chief Glenn Stevens has warned that while the country is enjoying the benefits of a mining boom resources need to be saved rather than spent straight away.

“With a large boost to income we need to think about the balance between saving and spending because we do not know the permanent level of the terms of trade. I argue for erring on the side of saving for the time being and I think this is by and large what is happening so far,” he said in a speech to a resources conference.”

“In the current episode the very high level of the terms of trade already seems to be persisting for longer than in previous episodes.”

Stevens noted that if China and India continued to increase investment “a strong pace of increase in demand for resources will likely persist for some time yet”.

He noted that the terms of trade are likely to fall during the next few years.

Shares lower after middle-east unrest continues

The Australian share market opened lower this morning after unrest continued in the Middle East, with oil production halted in Libya, where protestors have taken control of some cities.

The benchmark S&P/ASX200 index was down eight points or 0.18% to 4847.7 at 12.10 AEST and the Australian dollar slipped below parity to US99c.

AMP shares dropped 1.27% to $5.45, Commonwealth Bank shares dipped 0.62% to $52.88, NAB lost 0.43% to $25.72 and Westpac dropped 0.34% to $23.62.

Virgin Blue profit meets guidance

Virgin Blue has recorded a drop in first half net profit to $24 million, but the figure was within the company’s guidance of between $23-26 million.

Chief John Borghetti said business markets are improving but leisure travel is still taking its time to get back to normal.

“In the domestic leisure market flat consumer confidence, forecast industry capacity growth and flow-on impacts from the recent weather events will impact domestic demand,” he said in a statement. 

“We have seen yield improvements in both short and long haul with long haul in particular seeing a strong increase.”

AGL Energy profit up 30.4%

AGL Energy recorded a 30.4% increase in first half net profit to $239.6 million, saying the company is “heading in the right direction”.

Underlying profit dropped 3.7% to $226.2 million but the company flagged that result earlier this month due to the ongoing harsh weather conditions.

Chief executive Michael Fraser confirmed guidance of underlying profit for the full year to be between $415 million and $440 million.

“When we look ahead we are expecting in the second half a continued very strong performance from the retail business and certainly a higher result than they achieved in the second half last year,” he told AAP.

Wall Street stocks fall on Libya unrest

Stocks on Wall Street reached their lowest point since August due to ongoing fears over unrest in Libya, where oil production has halted.

The Dow Jones Industrial Average fell 178.46 points or 1.44% to 12,212.79.