Midday: David Jones profit dips; Sinodinos asked to stand down; Shares flat

David Jones’ first-half net profit fell 4.6% to $70.1 million as a 53% drop in earnings from credit card operations offset higher earnings from its core department store business.

Aggressive industry-wide discounting before Christmas kept the pressure on the department store’s margins.

“Our result this half reflects the momentum that our Future Strategic Direction Plan is gaining, with our core department store business delivering 8.3% EBIT growth,” David Jones chief executive and managing director Paul Zahra said in a statement.

“Our result this half also reflects the fact that the EBIT contribution from our Financial Services business broadly halved in line with previous guidance.”

Sinodinos asked to stand down

Assistant Treasurer Arthur Sinodinos should stand aside if he cannot immediately give a “full and proper explanation” of his dealings with a company linked to disgraced Labor faction leader Eddie Obeid, shadow treasurer Chris Bowen says.

Sinodinos was involved in negotiations to sell a $15 million stake in Australian Water Holdings to investors involved in a secret coal venture with Obeid.

Bowen has called on Sinodinos to appear before the Senate to explain himself.

Sharemarket flat

The Australian sharemarket opened flat following gains on Wall Street and easing tensions between Russia and Ukraine.

At the official market open, the benchmark S&P/ASX200 index was down 4.5 points, or 0.08%, at 5,340.1 points, while the broader All Ordinaries index was down 3.3 points, or 0.06%, to 5,356.9 points.

Ric Spooner, chief market analyst at CMC Markets, said the Australian market looks like taking its opening tone from US markets which pushed moderately higher with below average turnover. “Markets have taken Mr Putin’s statement that Russia doesn’t want to split up Ukraine as further evidence that the risk of escalation in this crisis is abating, at least for the short term,” he said.