Harvey Norman forecasts record sales, ANZ targets China: Economy Roundup

Retail giant Harvey Norman has released positive financial figures for the first half of the financial year, following comments from chairman Gerry Harvey yesterday which predicted this Christmas period would be a “very, very good” one for the company.

The retail chain forecast interim pre-tax profit to increase by more than 40% from the previous corresponding period, driven by sales growth between 1 July and 22 November and higher consumer confidence, the company said.

Additionally, sales for the period have grown by 7.7% to $1.93 billion, with like-for-like store sales also growing by 5.9%. The announcement comes after Harvey said yesterday that Christmas sales would be extremely positive.

“Our sales this year are going to be an absolute record, this is going to be the biggest Christmas we have ever had, we are going to break all records,” he said. “I am absolutely flabbergasted sales are as good as they are.”

The results come a long way from last year’s financials, which showed a first half net profit decline of 56.8% to $99.33 million for the company.

The Australian Taxation Office has begun an appeal in the Federal Court against a decision made earlier this year in favour of BHP Billiton.

The dispute relates to a $2.2 billion tax bill related to two of the company’s WA operations, according to The Australian. The office reportedly hopes to recover tax of $691 million, penalties of $173 million and interest of $577 million as of 30 June.

Shares open higher after good US housing data

The Australian sharemarket has opened higher today after good leads from Wall Street, where optimistic housing data gave investors confidence about the country’s economic recovery, but has fallen during morning trade.

The benchmark S&P/ASX200 index was up 0.8 points or 0.02% to 4717.9 at 12.00 AEST, while the Australian dollar also opened higher to US92c.

ANZ shares gained 1.4% to $22.21, while Commonwealth Bank also gained 0.8% to $53.21. Westpac gained 0.9% to $24.37, while NAB lost 0.1% to $28.37.

Regional lender Suncor-Metway has said it expects opportunities to arise that will allow it to divest non-core assets, but also said a “transformation” is not necessary.

Suncorp Bank chief executive David Foster said yesterday the company was taking advantage of divesting “where it makes sense”, but also said the company is seeing “positive signs” that some assets could record some value.

NAB chief executive Cameron Clyne has said the lender is considering moving further into the UK market, but may also leave the country depending on financial conditions.

“There is now some talk about the UK market changing,” Clyne said at an Australia-Israel Chamber of Commerce lunch yesterday. “At the moment it remains speculative but we’re watching it very closely and are very keen to see how it develops.”

ANZ plans to expand Chinese market

Meanwhile, ANZ has said it plans to commit $435 million into expanding its Chinese business after receiving regulatory approval, The Australian has reported.

ANZ Asia Pacific, Europe and America chief executive Alex Thursby has said the company will use additional capital to build up retail banking growth products for Chinese customers.

Airline giant Qantas has said it will spend $4.4 billion on new aircrafts in order to increase its profit margins and fight a decline in business travel.

The company has reportedly told investors it has allocated $1.7 billion for the current financial year and $2.7 billion for 2011 which will include eight Airbus A380 purchases. The announcement comes after the company said it would decrease the amount of first-class seats on its long-haul flights.

Transport group Toll Holdings has announced its success in gaining a five-year contract worth $1 billion with the Department of Defence.

“We are pleased to announce that Toll Transitions, the Toll group’s specialist relocations business, has been notified they have successfully tendered for the contract with the Department of Defence for the provision of both removal services and relocation administration services,” managing director Paul Little said in a statement.

“The initial five-year period is expected to generate revenues of more than $1 billion, and if extensions are granted, total revenue of around $2 billion would be expected.”

Overseas, investors in the US were optimistic after data was released that showed sales of previously owned homes jumped to a two-and-a-half year high at 10.1%, with an annual rate of 6.10 million units. The Dow Jones Industrial Average gained 32.79 points, or 1.29%, to 10,450.95.