ACCC launches case against Mitsubishi Electric Australia; WorleyParsons downgrades FY earnings forecast; Kathmandu sales lift slightly: Midday Roundup

The Australian Competition and Consumer Commission has filed legal proceedings against Mitsubishi Electric Australia for allegedly engaging in resale price maintenance.

Resale price maintenance occurs when a supplier attempts to make a business not resell or advertise goods or services below a minimum specified price.

The consumer watchdog alleges between 2009 and 2011 that Mitsubishi’s senior managers attempted to induce Mannix Electrical not to sell its Mitsubishi air conditioning products below a set price.

When Mannix did not do this, Mitsubishi supposedly reclassified it from a ‘dealer’ to a ‘contractor’.

The matter is scheduled for a directions hearing in the Federal Court on December 13, 2013.

WorleyParsons downgrades FY earnings forecast

Project delivery and consulting firm WorleyParsons has lowered its full and half-year earnings forecast for 2014, as the decline in its Australian business has been bigger than expected.

At 11:23 AEDT its shares were trading down 20.8% at $17.10 following the announcement.

The company’s net profit after tax for FY2014 is now expected to be in the range of $260 to $300 million, with first half earnings between $90 million to $110 million.

The revised outlook, which is still up on its 2012-13 results, reflects a reduction in professional services revenue compared to last financial year.

“This reduction is particularly evident in the company’s large Australian and Canadian businesses and to a lesser extent in Latin America and the Middle East,” WorleyParsons said in a statement.

Chief executive Andrew Wood said the company is positioned for medium term growth.

“The diversity of our business in terms of its geography, industry sector and service offering remains a fundamental strength,” Wood said in a statement.

Kathmandu sales lift slightly

Kathmandu sales have remained steady at $70.9 million for the 16 weeks to November 17, 0.09% higher than the previous corresponding period.

In the past year the retailer has grown its store count in Australia from 72 to 87 and New Zealand from 42 to 44, according to a presentation shown at its annual general meeting today.

“Despite difficult retail trading conditions, our sales performance in the first 16 weeks of the financial year was approximately in line with expectations,” chief executive officer Peter Halkett said in a statement.

Shares down on open

Aussie shares have dropped again this morning, as the Dow Jones upward climb ended overnight.

The S&P/ASX 200 benchmark fell 38.2 points on open to 5314.7 at 11:38am AEDT. Overnight the Dow Jones lost 8.99 points, down 0.06% to 15,967.03.

But as the markets fell, the dollar climbed, hitting its highest level in almost two weeks. It peaked in overnight trade when it reached 94.48 US cents, its highest level since November 8. At 11:38am AEDT this morning the dollar was trading at 94.3 US cents.