Myer profit falls 5.2%, Australian dollar below parity: Midday Roundup

Department store giant Myer has recorded a 5.2% fall in first-half profit, due to rising energy costs and interest rates, the company announced this morning.

However, the fall in sales was within its guidance, with the company also recording a net profit after tax of $108.9 million in the half-year to January 29. Myer had previously forecast a profit of between $106 million and $109 million.

Total sales were down 3.5% on the previous corresponding period, and were down by 5.2% on a like-for-like basis. The result was in line with company expectations, with chief executive Bernie Brookes saying that frugal customers and a challenging retail environment are driving down sales.

“Despite the ongoing challenging retail environment our strategy remains unchanged,” he said.

“Myer is very well placed to benefit from any increase in consumer confidence and discretionary spend when retail trading conditions improve.”

Brookes said the company’s disciplined inventory management “ended the period with a clean inventory position”.

Dollar plummets below parity

The Australian dollar has plummeted below parity this morning following a disappointing night on world markets, with ongoing worries about the nuclear emergency in Japan driving the dollar’s value down.

Economists fear the problems there could push the dollar towards US90c in the coming weeks.

The sharemarket has opened lower this morning due to fears over the Japanese recovery, following a disappointing night on Wall Street.

The benchmark S&P/ASX200 index was down 25 points or 0.57% to 4532.7 at 12.10 AEST, while the dollar was at US97.9c.

AMP shares lost 0.38% to $5.23 as NAB shares fell 0.62% to $24.20. ANZ lost 0.8% to $22.44 as Westpac fell 1.02% to $22.23.

Stocks also fell in the United States, where the Dow Jones Industrial Average fell 242 points or 2.04% to 11,613.20.

Oroton records $15.4 million profit

Oroton Group recorded a net profit of $15.4 million for the first half of the year, although the company says it is still cautious regarding its outlook.

EBITDA grew by 6.6% to $26.1 million from $24.5 million in the previous corresponding period. Like-for-like sales growth was flat.
“Overall, the outlook for the second half remains cautious, with the group well-placed to meet both changing customer expectations and uncertain market conditions,” the company said in a statement.

Chief executive Sally Macdonald also said in a statement the company is operating in a “highly discount-focused environment”.

“We strategically managed our own discounting levels to preserve the long-term positioning of our two premium brands – increasing our average selling price in our core Oroton bag line as a result,” she said.

Macquarie chairman David Clarke resigns

Macquarie Group chairman David Clarke has resigned due to health issues, the company has announced, with lead independent director Kevin McCann to take over his roll.

“[David] has played a pivotal role in setting Macquarie’s broad business strategies, recruitment and remuneration policies as well as its risk management, professional and ethical standards,” McCann said in a statement.

“These are the foundations of Macquarie’s success. David has much to be proud of.”

Kathmandu profit rises in first half

Clothing retail chain Kathmandu Holdings has recorded a net profit of $NZ10.5 million for the six months to January 31, the company announced this morning, in a result almost triple that of the previous corresponding period.

Chief executive Peter Halkett said the performance for the first of the year will depend on its first-half sales.

“Winter sale remains our largest annual promotional event, and this means we must successfully execute our strategies until virtually the last day of winter sale before we can be confident about our overall year’s result,” he said.