David Jones sales fall 3.1% in second quarter: Midday roundup

David Jones has reported total sales are down 3.1% for the second quarter, confirming its guidance of a 15% to 20% drop in first-half profit.

The company said like-for-like sales fell 2.4% in the quarter compared to the previous corresponding period.

Chief executive Paul Zahra said David Jones’ sales performance this quarter has reflected the continuing challenging retail environment, although there has been improvement.

“Trading conditions continue to reflect the uncertainty in the macro-economic environment with conservative consumer shopping continuing and no material signs that this is changing,” he said.

The retailer said state-wide sales have been consistent except for Queensland, where trading picked up after the January 2011 floods.

The beauty sector performed well, as did womenswear, menswear, footwear and accessories, which all reported growth.

Fairfax first half profit plummets 44%

Fairfax Media has announced first half profit has plummeted by 44%, prompting the company to outline a three-year plan to restructure the business.

Net profit was reported at $96.7 million for the period ending on December 25, down from $172.3 million in the previous corresponding period.

Revenue dropped 5% to $1.232 billion.

Chief executive Greg Hywood said advertising conditions in NSW and Victoria had been “extremely poor,” and there had been no improvement in the subdued New Zealand market.

“While the results are disappointing, over the last six months Fairfax Media has driven change through the business and we have done it in the midst of a severe cyclical downturn in our major markets,” he said.

“We now have a clear three-year strategy and detailed implementation plan to ensure we make consistent progress in reshaping our business and resetting our cost base to withstand both structural and cyclical threats.”

A fully franked interim dividend of two cents per share will be paid on March 21.

IAG profit falls 10.6% in first half

Insurance Australia Group has posted a 10.6% decline in first half profit to $144 million, saying the company expects to post a full-year insurance margin at the lower end of its guidance range.

Revenue from ordinary activities rose 8.5% to $6 billion, while insurance profit for the half was $271 million. The result represents a margin of 7.1%, down from last year’s figure of 12.76%.

IAG managing director and chief executive officer Mike Wilkins said the group had performed well despite current conditions.

“We expect to deliver an insurance margin at the lower end of our original guidance of 10-12% given credit spreads have taken 100 basis points off our margin on a full year basis,” he said.

“This guidance includes an increase in our forecast net natural peril claim costs for the year, offset by a slightly higher reserve release assumption.”

“We have also increased our gross written premiums growth guidance to eight to 10 per cent, up from our original expectation of six to nine per cent.”

Sharemarket falls on Greek bailout fears

The Australian sharemarket has opened lower this morning after weak overseas leads, as investors become more sceptical the Greek bailout deal can actually work.

The benchmark S&P/ASX200 index was down 24.3 points or 0.6% to 4268.8 at 12.00 AEST, while the Australian dollar fell to $US1.06c.

In the United States, the Dow Jones Industrial Average fell 27 points or 0.2% to 12,938.7.

Austar subscriber base falls in 2011

Austar reported its subscriber base fell in 2011 due to more competition, despite reporting an increase in net profit.

The company reported a 21% increase in first half profit after tax to $120 million compared with the previous corresponding period, although revenue growth was flat at $713 million.

Austar chief executive officer John Porter said MyStar continues to perform well.

“MyStar continues to be a strong differentiator for us, with existing customers opting-in for its control and convenience,” he said. “Our 2012 AFL coverage, where our customers will see every game, of every round, live, has added another compelling dimension to our service.”