Small Cap Monitor:

Lend Lease Faces Headwinds.

Construction company Lend Lease (LLC) delivered a 49% increase in half year profit on Thursday.

However, due to tougher market conditions, management expect to come slightly under targeted earnings growth for the full year.

Lend Lease said statutory profit after tax was $259.6 million compared to $174.7 million the previous corresponding period.

The net operating profit was $262.8 million, a 61% increase from $163.5 million.

Managing director Greg Clarke said Lend Lease, like most other companies, faces increasing headwinds from the slowing US economy, tightened credit markets and softer property markets in the UK; however the group is well placed to continue to deliver ongoing earnings growth.

“Our balance sheet strength gives us good flexibility and access to capital to fund our development pipeline, while the diversity and sector focus of our operating businesses mean we are well placed to deal with market volatility,” Clarke said.
“For full year 2008, even without a major asset sale, we are expecting to come in slightly under our target annual average EPS growth of 10% p.a. over a five-year period.”

In the six months to 31 December 2007, the group’s operating profit gained 60% to 65.5 cents.

Lend Lease declared an interim dividend of 43 cents per share, up from 35 cents, although franking decreased from 50% to 40%.

In March Lend Lease won preferred bidder status to build the $7.9 billion Olympic Village in London for the 2012 Olympic Games

The two phase project will have a potential value of about $13.7 billion.

Shares in LLC closed 28 cents down to $14.42.

Origin Energy’s H1 Propels Shares 8%

Origin Energy (ORG) said on Thursday it expects a strong second half after delivering a fall in underlying profit for first half results, propelling the shares in the gas and electricity retailer as much as 8.6% higher.

Shares in ORG ended a five-day losing streak, climbing 63 cents or 7.9% to finish at $8.55.

The Sydney-based company posted an underlying profit of $200 million for the half year ended 31 December 2007, a decline of 3% on the prior corresponding period.

However, including one-off items, net earnings increased 44% to $335 million from $233 million in the prior half year.

“Notwithstanding the small decline in underlying profit of 3% to $200 million, our operating cashflow after tax of $385 million was up 5% on the previous corresponding period. This reflects the strength of Origin’s business,” chairman Kevin McCann said.

The net profit contains a number of significant items and one-off costs such as Contact Energy’s retirement of the New Plymouth Power Station and Origin’s acquisition of Sun Retail.

Origin is positive in its second half results based on the performance for the opening two months and the continuation of current market conditions.

A decrease in wholesale electricity costs and the addition of earnings from the Otway Gas Project in March 2008 are are primarily behind the positive outlook, the company said.

“We had previously given guidance that growth in full year profit would be between 10-15%. Based on current market conditions we expect a stronger second half which should result in an increase in full year profit of at least 15%,” McCann said.

An interim dividend of 12 cents per share was declared, compared to 10 cents for the prior half year.

“Recent additions to the company’s debt facilities, together with strong cash flow, see the company well placed to continue to access funds for its ongoing development and growth,” Origin said.

This alleviates any possible concerns investors may have in the face of companies facing debt problems and margin calls in the current reporting season.

The Exploration and Production segment achieved record production and revenue for the half year.

In retail, sales volumes and revenues were records for the first half, following the acquisition of Sun Retail.

Its Contact Energy business contributed $246 million to earnings before interest, tax, depreciation, amortisation and change in value of financial instruments (EBITDAF).

Managing director, Grant King said, “Despite high levels of competition we continue to grow our Retail business”.

Origin Energy is a top 100 ASX listed company involved in gas and oil exploration and production, energy retailing, power generation and utility network management, and has been listed on the Australian Stock Exchange since 1961.

Horse Flu Takes Its Toll: Tatts Disappoints

Australian gaming company Tatts Group (TTS) announced today that its first half net profit rose 23.5% to $133.02 million, boosted by an acquisition. Even so, gaming revenues performed poorly due to the outbreak of horse flu.

Tatts, formerly known as Tattersalls, said their first half profit included the first contribution from the acquisition of Golden Casket Lottery Corp in Queensland, which assisted Tatts Lotteries’ 21% earnings growth.

Nevertheless, the market was not impressed with the result and shares in Tatts fell 5.4% at market open this morning to $3.88.

Tatts said in a statement today that it has come a long way since its merger with Queensland-based wagering firm UNiTAB in 2006.

“Importantly, we have changed our name and put the Trustees dispute behind us.”

“Nevertheless, we continue to encounter damaging allegations about Tattersall’s past business practices.

“These allegations stem from a previous era, and it is noteworthy that there has not been a single allegation of improper or questionable business practices since the merger in 2006.”

Tatts said it remains committed to the responsible delivery of its services.

The gaming company reported that revenue for the six months to December 31 was up by 33.4% to $1.53 billion and its poker machine operations achieved revenue and other income of $658.7 million for the first half, up 2.4% on the previous corresponding period.

Tatts said it had been able to withstand the burden of increased levies on gaming machines in Victoria, as well as smoking bans in Victoria and in the UK.

Earnings at the UNiTAB wagering business fell more than 8% as equine influenza interrupted racing in two states.

“Sales have bounced back since racing in South East Queensland and Sydney resumed in December, despite some damage to the program caused by wet weather in both states,” Tatts said.

In regards to their disappointing results, Tatts stressed that the second half of a financial year was never as strong as the first because there were fewer days and fewer events to drive spending on recreational services.

Tatts said the major risk factor for the current half would be the potential impact of bad weather on the Easter and Winter racing carnivals.

Tatt’s has doubled earnings since buying betting group UNiTAB in 2006 for nearly $2 billion.

Bad Credit And Weather Hammer Suncorp H1

Suncorp-Metway (SUN) has reported a 27.5% fall in first half profit due to increased payouts from bad weather and the fallout from the global credit crisis.

Australia’s second-largest home and car insurer said net profit for the six months to December 31 was $382 million, down from $527 million in the previous corresponding period.

Insurance profit dropped by 55% to $172 million as storm-related claims in western Sydney, Lismore in northern New South Wales and New Zealand totalled $280 million in the half.

But Suncorp upgraded its banking division outlook and now expects full year profit growth before bad debts of 10 to 12%.

Suncorp chief executive John Mulcahy said external factors are likely to impact the group’s outlook for the full financial year.

“We expect that global credit markets will remain volatile in the short term with little prospect of immediate contraction in credit spreads,” he said.

“In the event credit spreads widen further it is likely the banking sector will move to adjust its lending rates to appropriately reflect the increased cost of funds.”

“This gives us confidence that the full year impact of the credit crunch will be no more than our October 2007 forecast of $10 million to $15 million pre-tax.”

Shares in Suncorp fell by 6% to $14.60 at market open this morning, extending their decline over the past 12 months to 33%.

Profit from banking operations rose 6.2% to $307 million from a year earlier. Suncorp is Australia’s sixth- biggest bank.

The value of fixed-income investments dropped by $85 million in the General Insurance division. However, the wealth management business posted 28% profit growth to $125 million in the half as funds under management rose to $27.1 billion.

The integration of Promina Group is expected to increase annual earnings by $325 million - $100 million a year more than initially estimated and in-line with its February forecast. Suncorp will incur a one-time implementation cost of $375 million related to the takeover, the company said.

Shares in Suncorp dropped 7.86% to close down at $14.31

Shares in Tatts fell by 5.61% to close at $3.87

This article is contributed by Australasian Investment Review – (AIR) You can subscribe for their free newsletter at

banksy graffiti · barack obama · banksy art

macbook parts · macbook reviews · cheap macbook

fairey obey giant · peter max art