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PRESS DIGEST-Australian Business News - July 29

Source: Reuters - Sun, 28 Jul 2013 08:55 PM
Author: Reuters
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Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Boutique A$9.5 billion fund manager Ausbil Dexia, previously a key shareholder in Echo Entertainment, has sold all its Echo shares, citing disappointment over the lack of significant revenue increase following the A$870 million redevelopment of its Star casino in Sydney. "I think it is a good property but it just seems to be not attracting the masses these days," said Ausbil chief executive Paul Xiradis. Page 11.

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Software start-up SmartWard has developed a computerized method of updating hospital patient records that replaces the need for hand-written patient-care notes, with live trials starting today in two hospitals in Melbourne. The company has the backing of Primary Health Care chairman Rob Ferguson as founder Matt Darling seeks a further A$15 million to A$30 million to build the company and supply its humanitarian and economic benefits to the health sector. Page 11.

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Building and construction materials supplier Boral has announced a downgrade of its net profit after tax for 2012-13 to between A$90 million and A$105 million, significantly less than earlier analyst forecasts of A$139.7 million. Profit expectations of around A$200 million for 2013-14 are currently being reviewed by analysts as the Australian Industry Group and Housing Industry Australia Performance of Construction Index displays 37 consecutive months of contraction in the building industry. Page 13.

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Chris Cuffe departed Colonial First State with over A$30 million in various payments, was paid over A$2 million a year working at Challenger, founded Third Link Investments, a fund manager that donates about A$70,000 a month to charities, and founded and currently encourage Australia's wealthy to act philanthropically as he chairs Australian Philanthropic Services. To facilitate philanthropy in Australia, Mr Cuffe aims to provide improved advice, such as changing trust structures, and stated the increasing number of clients indicates the success of the benevolent endeavor. Page 13.

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Henderson Global Investors will be searching the Australian funds management market for acquisitions over the next 12 months as it seeks to expand its operations in Australia under Australian executive chairman Rob Adams. In preparation for an August 8 delivery of half-year results, Henderson is forecasting an underlying profit of 100 million British pounds from around 68.9 billion pounds of assets under management. Page 14.

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The resources boom in Australia isn't over, but the sector has entered a new normal of sustainable above average growth, according to Australia and New Zealand Banking Group (ANZ) senior executive Cathryn Carver. For the benefit of the nation, the Australian government should reduce red tape and address productivity issues, said Ms Carver, who has relocated from Hong Kong to Perth to manage some of ANZ's largest clients as the bank seeks to capitalise on the economic growth of Asia. Page 14.

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Sydney-based general insurance and reinsurance company QBE Insurance Group may be liable for claims arising from Friday's train crash in Spain that left 78 people confirmed dead and many more in hospital. QBE provides third-party liability cover to the state-owned Spanish rail network, Renfe, with re-insurance arrangements providing a cap of US$50 million for each distinct event. Page 15.

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Following its annual review of its various brands, Qantas Airways will keep its domestic division's QantasLink regional operator, distinct from its mainline carrier. For 2011-12, QantasLink transported 5.2 million passengers using Boeing 717s and Bombardier Dash 8s in mainly shorter flights that provided 3 percent of the group's revenue passenger kilometers from 11 percent of the group's passengers. Page 16.

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The Northern Territory (NT) government has altered the terms of an agreement with Rio Tinto for gas supply to the unprofitable Gove aluminium refinery of Rio subsidiary Pacific Aluminium following a the due diligence process that identified unacceptable risks to the NT economy. "An affordable energy solution for the Gove refinery is needed to secure its long-term viability," stated a Pacific Aluminium spokesman, as the future of the operation moved under a black cloud. Page 16.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Silcar, the joint venture between German engineering company Siemens and Australian construction contractor Thiess Services, is continuing with the rollout of the national broadband network (NBN) in New South Wales, Queensland and the Australian Capital Territory with around 685 people deployed in the field, said acting chief executive Pat Burke last week. Citing government rates that make the enterprise unprofitable, sources close to Silcar have reported the company is considering exiting the NBN project. Page 17.

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The Australian Shareholders' Association has identified companies where the chairman receives yearly fees worth more than their company shareholdings. Noted chairman include: Brian Scullin of Spark Infrastructure who collects A$245,000 a year but has no shares in the company; Les Hosking of Adelaide Brighton picks up A$269,178 annually with shares worth A$15,600; and Roger Corbett of Fairfax Media accepts A$432,730 a year while holding A$48,000 in shares. Page 17.

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The broad environment for BHP Billiton's Jansen crop-nutrient potash project in Canada is a world that analysts believe will need to increase food production by 60 percent by 2050. BHP will allocate another US$500 million to Jansen with a final decision on full project go ahead to be made in 2015-16, predict Goldman Sachs. Page 17.

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Bob Vassie, new managing director of Inova Resources , previously Ivanhoe Australia, has indicated the company will take a more forceful approach in its quest to obtain a partner to contribute to the development of the flagship A$345 million Merlin molybdenum and rhenium project located near Mount Isa in Queensland. The optimism of the company is not matched by its controlling shareholder, the Canadian-listed Rio Tinto subsidiary Turquoise Hill, which has appointed bankers to sell its Inova holding. Page 17.

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Aurizon chief executive Lance Hockridge yesterday said the building of an independent A$10 billion railway in Western Australia's Pilbara region was a 30- to 40-year undertaking and although initial investigation was promising no decisions would be made "any time soon". It currently costs Atlas Iron an average of A$13 a tonne to transport ore to Port Hedland and access to a rail network similar to those on the east coast could reduce these costs as low as A5 to A6 cents a tonne, said managing director Ken Brinsden. Page 18.

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Pricing expert Frank Bilstein, a partner at global management consulting firm A.T. Kearney currently in Australia, warned local retailers that price wars can create customers that will only buy discounted products. Rampant discounting in Germany had turned the country into the European dumping ground for poor-quality goods, said Mr Bilstein, who also cited low prices charged for data used by smartphones in parts of the United States for creating networks with "abysmal" operational performance. The perceived risk of putting prices up is over-estimated, Mr Bilstein added. Page 19.

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As part of its strategy to overtake its premium car rivals, such as BMW and Mercedes-Benz, Audi Australia last night launched its A$3 million "Land of quattro" advertising campaign. Over 2013-14, Audi will invest A$50 million in its dealer network. "Our plan is that by 2020 we'll definitely be No 1 in the market place," stated managing director Andrew Doyle. Page 19.

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There will be a 7 percent increase in commercial building activity over the next financial year, according to the latest report from industry research, analysis and forecasting firm BIS Shrapnel. The following year will see the beginning of a three-year fall in construction, the report adds. "The Australian economy will remain balanced on a knife-edge," said associate director Kim Hawtrey, as the country waits to see "how quickly the construction sector can take on more of the heavy lifting." Page 19.

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Financial planning chain Centric Wealth's 75 percent owner CHAMP Private Equity is putting its stake up for sale with Macquarie Capital managing the process. "We think somewhere between A$150 million and A$200 million would be a great and fair price," said Phil Kearns, Centric shareholder and chief executive and legend from his days with the Wallabies rugby team. Centric asserts it is responsible for A$3.7 billion in assets under advice, A$1.3 billion in loans under advice and life insurance worth "billions of dollars". Page 19.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

K.T. Lim, chairman of Malaysian gaming company Genting , said that his company had yet to form a view on how much of Australian counterpart Echo Entertainment it would like to own as it waits for approval to take its holding in Echo as high as 25 percent. One of the largest casino operators in Asia, Genting would have the capability of taking Echo over completely, according to a number of analysts. Page 21.

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THE AGE (www.theage.com.au)

Australia and New Zealand Banking Group is believed to have re-initiated its process to replace Alex Thursby, who departed in April as prime mover for the bank's Asian strategy. His eventual replacement is thought to be moving into a prime position, potential to be the next chief executive when current incumbent Mike Smith makes his departure. Page 23.

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