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Published on: Wednesday, May 17, 2017

  • DuluxGroup has posted a net profit after tax (NPAT) of $72.7 million for the six months to 31 March 2017. That’s an increase of 14.2% compared to the prior corresponding period. The group’s result included a $3.1 million write-back of a tax provision. Without this write-back, NPAT increased by 9.3%. In a statement to the ASX, the paint company also said sales revenue increased by 3.5% to $881.2 million. “Subject to economic conditions, and excluding non-recurring items, we expect that 2017 net profit after tax will be higher than the 2016 equivalent of $130.4 million.”
  • Wesfarmers has decided against spinning off its Officeworks business through an initial public offering (IPO). After undertaking a strategic review into the business in February, Wesfarmers said: “In light of current equity market conditions, Wesfarmers has determined that an IPO of Officeworks at this point in time would not realise appropriate value and would not in the best interest of its shareholders”. Since Wesfarmers acquired Officeworks in 2007, Officeworks has more than doubled its earnings and improved its return on capital from 5.7% in the 2009 financial year, to 13.9% in the first half of 2016/17. Wesfarmers Managing Director, Richard Goyder, said that the Officeworks business would only be divested if it was considered to be in the best interest of shareholders.
  • Managing director of Coca-Cola Amatil, Alison Watson, has not ruled out lowering the price of its bottled water brand Mt Franklin to protect its market share and remain competitive on price. Despite saying that consumers are willing to pay a premium for Mt Franklin, Ms Watkins told the Australian Financial Review that “Private label does set a base and so we’ll maintain the competitiveness of Mt Franklin relative to the other parts of the water category.” According to the AFR, analysts say a price war in the bottled water market is behind a downturn in the earnings in Coca-Cola Amatil’s Australian beverages business – and that it may actually be having larger impact on sales than a shift away from sugary drinks.
  • US share markets finished mixed on Tuesday. Technology stocks helped lift the Nasdaq, however the S&P 500 and the Dow Jones finished flat on the back of mixed economic data and retail earnings (AAP). The Nasdaq finished 20.2 points or 0.3% higher at 6169.87, the Dow Jones finished 2.19 points lower at 20979.75, and the S&P 500 closed 1.65 points lower at 2400.67.
  • At 0700 AEST on Wednesday, the local share price futures index was up one point, or 0.02 per cent, at 5,855.

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