JB Hi-Fi shares rise 6% on news of share buy back: Midday Roundup

JB Hi-Fi shares have jumped by 6% this morning to $19.59 after the company announced a share buyback, along with a downgrade in its expected profit for the full 2011 financial year.

The announcement came as a shock, with JB viewed as one of the more stable and dependable retail businesses amid a flood of discounts.

In a statement released this morning, JB said it will buy-back up to 10% of its shares on issue, representing approximately $170 million.

This will be used for restructuring the Clive Anthony’s business, following “a detailed review”. JB will record a one-off post-tax charge of $24.8 million as a result of the restructure.

The impact on the company’s financial results will mean statutory net profit will be between $108.5 million to $113.5 million, however, underlying profit will remain between $134 million and $139 million.

In a statement, JB said the restructure of the Clive Anthony’s business will incur a once-off charge, with the company not expecting any further charges in relation to the business.

Chairman Patrick Elliot also announced that former chief executive Richard Uechtritz and Beth Laughton will join the company as non-executive directors.

Woolworths says milk margins thin, but not below cost

Supermarket giant Woolworths has said it is not selling milk at below cost as a part of its price war with Coles.

General manager of fresh foods at Woolworths, Pat McEntee, told a Senate inquiry this morning that although profit margins are “very skinny” the company is still making money from the sales.

“We are not selling (own brand) milk below cost,” he said.

Shares flat after weak Wall Street lead

The Australian sharemarket has opened flat this morning, following a weak night on Wall Street where stocks fell due to fears over corporate financial results.

The benchmark S&P/ASX200 index was up five points or 0.11% to 4739 at 12.15 AEST, while the Australian dollar dropped from its 29-year high of $US1.03, settling at $US1.02.

AMP shares gained 0.35% this morning to $5.35, while ANZ rose 0.04% to $23.45. Westpac rose 0.34% to $23.93 as Commonwealth Bank shares gained 0.17% to $51.83.

On Wall Street, fears over corporate results combined with concerns over the radioactive leak at the Japanese Fukushima nuclear plant sent the Dow Jones Industrial Average down 22.7 points or 0.19% to 12,197.88.

RBA announces new board appointments

The Federal Government has named John Edwards and Catherine Tanna as new board members of the Reserve Bank of Australia.

Treasurer Wayne Swan said in a statement the two new members would bring a combination of “business, academic and professional economic experience to the RBA board”.

“They share an understanding of the macro-economic implications of the strength of our resources sector and the opportunities flowing from Australia’s location on the doorstep of Asia.”

Both members will replace Donald McGauchie and Warwick Mckibbin, whose terms expire this year.

Cephalon to buy ChemGenex

Cephalon has announced an offer to purchase the Australian pharmaceuticals company ChemGenex for $US231 million.

In a statement, the company said the Cephalon bid “has the unanimous support of the ChemGenex directions”.

The company is now awaiting approval from the Food and Drug Administration.