Myer, DJs merger warning

Myer was keen to maintain the two brands while cutting back-office costs in any merger. Photo: Jim RiceWith Myer believed to be preparing to dust off its $3 billion merger proposal for David Jones, new research suggests the combined group could lose millions of loyal customers unless they successfully differentiate their brands.
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Analysts say David Jones risks losing about 26 per cent of its customers – those who only shop at the upmarket department store rather than its mid-market rival – if the ”merger of equals” is mishandled.

According to Roy Morgan data, about 74 per cent of the 3.4 million customers who shopped at David Jones last year also shopped at Myer, which served around 5.8 million customers.

Under the merger proposal put to the David Jones board in October, Myer planned to maintain the Myer and David Jones brands and develop more differentiated offers to better target their respective customers and protect their combined sales.

Myer planned to maintain two independent merchandise and store operations teams, but the head office would probably move to Melbourne and functions such as supply chain, IT, human resources and treasury would be merged to try to extract synergy benefits estimated to be around $85 million a year.

Analysts said the merged companies could struggle to retain their most loyal customers if cost cutting, sourcing and sharing of services went too far and each chain lost its identity.

”Anything that blurs the boundaries between the department stores could create more problems and this data backs that up,” one analyst said. ”About 26 per cent of David Jones shoppers are loyal to David Jones and don’t shop at Myer – the challenge is trying to retain them when you merge the two,” he said.

”The biggest risk is the customers who don’t shop at both – they should be able to retain those customers who shop at both [Myer and David Jones]. They might not be as loyal to David Jones if it is no longer as differentiated from Myer because it is owned by Myer,” he said.

If the merged group maintained two head office structures and two supply chains in a bid to preserve their identities the cost synergies would be significantly less than $85 million a year.

This would reduce the value created by the merger, which Myer and its advisers believe could be as high as $900 million within three years.

Myer is considering a new approach to the David Jones board as soon as the retailer has appointed a new chairman and two non-executive directors. David Jones chairman Peter Mason and directors Steve Vamos and Leigh Clapham agreed to step down last week after pressure from shareholders angry about inappropriate share trading and poor corporate governance.

David Jones is also waiting to learn whether chief executive Paul Zahra changes his departure plans and stays on deck to complete the next stage of his turnaround plan.

Mr Mason has said the board would never consider a nil-premium merger, but would reconsider a merger proposal if the terms significantly improved.

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Magwatch: When politics and gossip mags collide with Obama ‘affair’

Regular Magwatch readers will know there are generally only four stories that can possibly be reported – who’s bust up; who’s hooked up; who’s porked up; and who’s lightened up. However, both New Idea and Famous break new ground this week with a thoughtful treatise on US politics.
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Leaving aside trivia such as healthcare reform and the US Fed’s quantitative easing policy, they go straight for the big one: Is Barack bonking Beyonce?

New Idea speculates furiously about furious speculation in some French newspapers that Obama is, as it is known in the business, “doing a Monica”.

Of course everyone involved has denied the rumours – presumably because they are, as it is also known in the business, “untrue”. Regardless, New Idea insists “the damage has been done” – while failing to add that it’s been done, at least in part, by New Idea and Famous.

On more familiar ground, Famous and New Weekly feature breathless reports on one Vito Schnabel, 27, an admirable young bloke who goes out of his way to help the elderly. So dedicated is he to his worthy project that he has recently been spotted squiring Heidi Klum, 40. Before that he was doing his bit with 51-year-old Demi Moore and has also been “linked” with Elle Macpherson and Liv Tyler.

Meanwhile, New Idea also looks at some of the issues facing mature women with its spread on the World’s Most Wanted Grannies.

This line-up includes Brazilian Heloisa Goncalves Duque Ribeiro, 63, who has so far knocked off four ex-partners, and Elizabeth Duke, 73, wanted for a robbery that killed a security guard and two police.

Perhaps big-hearted, cougar-chasing Vito could offer his services to detectives to tempt these wrinkly reprobates out into the open?

Finally, in yet more news relating to older women, Famous has a shot of actress Tara Reid leaving a Los Angeles breast screening clinic. But the mag must have missed the campaigns encouraging women over 40 to get regular mammograms, because rather than a measured heading saying “Sensible Tara gets health check” it somehow ended up with “Terrified Tara’s Health Scare”.

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Karen Martini’s creme fraiche recipes

Fried morcilla sausage with figs, pickled eschalots and creme fraiche. Photo: Marcel Aucar Karen Martini creme fraiche recipes.
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Karen Martini creme fraiche recipes.

Though creme fraiche and the less glamorously titled sour cream have different fat contents and are made a little differently, they both bring much to savoury cooking, with a lightly tart profile that balances the creamy richness.Fried morcilla sausage with figs, pickled eschalots and creme fraiche

This is quite a sophisticated and intense dish, with the rich, spicy blood sausage complemented so well by the luscious fig and tangy creme fraiche – perfect as a small appetiser or a tapa.

30g pearl barley

salt flakes

pinch sugar

2 purple eschalots, in 3mm slices

extra-virgin olive oil

2 morcilla sausages, sliced about 2cm thick on an angle

4 tbsp creme fraiche

2 large ripe figs, sliced thickly

2 handfuls baby kale (or use baby spinach or baby rocket)

sherry vinegar

1. Heat three centimetres of oil in a small pot until about 200C. Fry the barley in batches until it puffs up (a few seconds). Remove, drain on paper towels and season.

2. Add a pinch of salt and sugar to the sliced eschalots, toss through and set aside for five minutes to soften.

3. Heat a splash of oil in a frying pan and cook the morcilla until crisp, about one minute each side.

4. Dollop one tablespoon of creme fraiche on to each plate, top with the hot morcilla and fig slices and scatter over the eschalots and kale. Dress with a little vinegar and oil, sprinkle over the puffed barley and serve immediately.

Serves 4

Drink Try a Spanish white such as godello or a light, unoaked tempranillo.

Vinaigrette potatoes with cornichons, caperberries and fried egg

This is a delicious breakfast or brunch dish. You could easily add cured or smoked fish or even diced, warm corned beef.

10 chat potatoes, unpeeled

2 tbsp white wine vinegar

extra-virgin olive oil

salt flakes

freshly ground black pepper

4 free-range eggs

2 handfuls parsley leaves, torn

1 handful fresh dill

10 tiny cornichons, split lengthways

2 spring onions, very finely sliced

2 green chillies, finely sliced

4 tbsp creme fraiche

8 caperberries (from delicatessen)

1. Boil the potatoes whole until tender. Drain well, slice in half and add to a bowl with the vinegar and two tablespoons of oil. Season with salt and pepper, toss through gently and set aside for five to 10 minutes to take up the flavour and cool a little.

2. In a non-stick frying pan heat a little oil, crack in the eggs, season and fry sunny side up, leaving the yolk runny.

3. While the eggs cook, gently toss the potatoes with the parsley, dill, cornichons, spring onion and chilli.

4. Dollop the creme fraiche on to each plate, pile on the potatoes, top with the egg and caperberries and serve.

Serves 4

Drink: For a late brunch, a glass of gruner veltliner would be perfect.

Onion, gruyere, speck and sour cream tart with smoked mussels

This is my take on the German classic, zwiebelkuchen, which basically translates as onion cake. My version is a bit richer with the addition of gruyere and also has a twist with the smoked mussels – though it’s delicious without them as well.

Sour cream pastry

250g plain flour

150g butter, chilled and diced

1 tsp salt flakes

1 egg

2 tbsp sour cream

Filling

100g smoked speck, finely diced

30g unsalted butter

4 cloves garlic, finely sliced

4 white onions, finely sliced (about 350g)

2 eggs

350g sour cream

1 tbsp plain flour

350g gruyere

coarsely grated salt flakes

freshly ground black pepper

2 tsp smoked paprika

To serve

18-20 smoked chilli mussels (you can buy these vacuum-packed)

1/2 bunch dill, picked and chopped

1 lemon

1. Preheat the oven to 165C fan-forced or 185C conventional.

2. In a saute pan over medium heat, cook the speck until it starts to brown. Add the butter, garlic and onion and gently cook for 15-20 minutes or until soft and translucent but not browning. Set aside to cool.

3. While the onions cook, whiz the flour, butter and salt in a food processor to a sandy crumb. Add the egg and sour cream and process until it starts to form a ball. Form into a round between two sheets of baking paper and chill for half an hour.

4. When you are ready to bake the tart, in a large bowl whisk together the eggs, sour cream and flour, add the gruyere and the garlic and onion mix, season lightly with salt and pepper and mix through.

5. Roll chilled pastry into a rough rectangle and place on a baking tray on baking paper. Pour mix on to the pastry (mix will be stiffish and malleable), leaving a border around the edge of three to four centimetres. Fold edges up, crimping corners together to make a free-form tart. Sprinkle with paprika. Bake 30-40 minutes or until golden. Cool to room temperature.

6. To serve, toss the mussels through the dill with a squeeze of lemon. Cut the tart into portions, top with the mussels, serve.

Serves 8-10

Drink a good weissbier

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Record coal exports to China boost Aurizon’s forecast

Aurizon has hauled a record amount of coal. Photo: Darren PatemanAurizon chief executive Lance Hockridge signalled cost cutting by mining customers was paying off as the rail operator hauled record amounts of coal in the first half of the year and raised 2014 forecasts.
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The weakening Australian dollar and extensive cost cutting by key customers like the BHP Mitsubishi Alliance had improved local miners’ competitiveness as they sold coal to China, Mr Hockridge said.

”Our Australian customers are very focused on retaining, indeed improving, their market share of the available demand, and that’s all about a cost and efficiency game,” he said.

Aurizon has benefited from the higher exports, with the group’s coal haulage volumes rising 13 per cent to 109.7 million tonnes in the six months to December.

Underlying earnings before interest and taxation (EBIT) in its coal division rose 32 per cent to $187 million and Aurizon lifted its full-year haulage guidance to 207-212 million tonnes from 200-205 million tonnes.

The rail operator has been cutting costs and improving productivity to meet the mining companies’ demands for more efficient and flexible services, Mr Hockridge said. ”We’re able to give our clients the confidence they can sell against the available market.”

But despite stronger coal volumes, Aurizon’s half-year net profit fell 39 per cent as it took a $197 million asset impairment charge (previously announced in December) related to the shrinking of its locomotive and wagon fleet and job cuts.

Aurizon shed 262 jobs through a voluntary redundancy program in the first half and expects further redundancies as other parts of its business, such as its rail corridor between Townsville and Mount Isa in Queensland, are restructured.

Underlying earnings before interest and taxation, which exclude impairments and job cuts, rose 19 per cent to $423 million.

Aurizon is ”likely ahead of target” on its goal to reduce its operating ratio (which measures operating expenses as a percentage of revenue) to 75 per cent by fiscal 2015 from 94 per cent three years ago, Citigroup analyst Anthony Moulder said.

Mr Hockridge warned Aurizon could face industrial action from more than 100 train drivers in NSW’s Hunter Valley as it renegotiates long-standing employee agreements but said the group was committed to change.

”We will continue to reform the business no matter what the outcomes,” he said.

Aurizon has also made progress in discussions with Indian coal miner GVK Hancock over a joint rail and port venture in Queensland’s Galilee Basin, and hopes to sign a formal agreement in the first half of 2014, Mr Hockridge said.

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Forge axes CEO David Simpson after loss of Horizon Power contract

Forge chief executive David Simpson is believed to have been made redundant from the failed mining services company, joining thousands of rank-and-file workers who have lost their jobs in the wake of its slide into administration.
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Mr Simpson’s exit in recent days came as Forge lost one of its two remaining contracts over the weekend; the $125 million deal with Horizon Power to build a new power station at South Hedland in Western Australia.

That leaves Forge holding just one contract – to build the Diamantina power station in Queensland – and there was speculation last night that it could be gone within days, too.

The loss of Horizon has seen a further 70 Forge workers lose their jobs, adding to the estimated 1400 to have already been let go.

Last week Forge employees who were working on power stations and mining projects in Western Australia and Queensland were retrenched after the principals of the construction jobs exercised contractual rights they claimed on the projects.

Their retrenchment followed Forge’s financiers withdrawing support for the company earlier last week, with KordaMentha Restructuring appointed receiver and manager, after Forge appointed Ferrier Hodgson as the voluntary administrators.

Still, it is hoped that many of the retrenched employees will find work quickly, and it appears that about 50 former Forge employees working on Gina Rinehart’s Roy Hill project will be rehired within days.

Forge and Spanish company Duro Felguera won a $1.47 billion contract to build a processing plant at Roy Hill in December, but Forge’s slide into administration last week has cast doubt over the future of that work, and the jobs of the Forge employees.

Skilled Group spokeswoman Delphine Cassidy said on Monday the company would take on more than 50 of the former Forge employees that were working on Roy Hill, as part of efforts to ensure the contract was not compromised.

The hiring is expected to be an interim measure until a reworking of the contract – which is Duro Felguera’s first in Australia – is completed.

Roy Hill spokesman Darryl Hockey said the Forge failure would not have a major impact on the scheduled completion date of the $US10 billion mine, port and rail project.

”Continuity of construction is important to the Roy Hill project. The key contractors are moving to get things back on track very quickly,” he said.

”We are confident our long-term interests have not been unduly impacted.”

Roy Hill is a joint venture between Ms Rinehart’s Hancock Prospecting, Korean steelmaker Posco, China Steel Corporation and Japanese company Marubeni.

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Best of the best NSW produce

Prime yields: cool-climate apples.Many years ago, wheat farmer Doug Cush was in Italy selling wheat. When a buyer for one of the large pasta manufacturers asked him where he was from, Cush told him somewhere between Narrabri and Moree in the north-west of NSW.
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”Aah, Bellata,” said the Italian buyer.

”How could he have known that?” Cush says. ”Bellata is tiny. There’s only 400 people in the district and 100 people in town, and that’s probably an exaggeration.”

What the Italian buyer knew about this small Australian farming community was that it produced some of the world’s best durum wheat.

Northern NSW is prime hard wheat-growing country. With a gluten count of between 40 and 50 per cent – much higher than soft wheat used in bread and biscuit-making – hard wheat is the key to good pasta.

Cush would never have contemplated growing anything else. ”What you aim to do as a farmer is look to the land and climate,” he says. ”We don’t try to grow biscuit flour because the climate here is wrong.”

NSW abounds with places that have become synonymous with the food grown there. Mention Bilpin or Batlow and you’ll get ”apples” in response. These cool-climate growing areas, along with Orange in the NSW central west, make NSW the second-highest apple producer in the country after Victoria. (Who knew we produce more apples than Tasmania, the Apple Isle?)

When it comes to potatoes you’re talking Dorrigo on the Northern Tablelands and Robertson in the Southern Highlands.

”Go into any fruit and vegetable shop on the east coast of NSW and the best looking potato on the shelf will be a Robertson potato,” says John Hill, Robertson potato farmer.

Like all farmland close to Sydney, Robertson has come under intense pressure from rising land prices and over the years the number of potato growers has fallen from 40 to three. With 60 hectares under cultivation, the Hill family – three generations are involved in the farm – is the largest grower in the district.

At the other end of the spectrum is Norman Gair, who decided 10 years ago to stay small and grow exclusively for farmers’ markets. He and partner Robyn Jackson grow 42 varieties of potato on their Robertson farm, including Toolangi delights and Otway reds.

”The iron-rich ferrosols that you find in Robertson have the advantage of a fine microstructure that doesn’t impede growth or drainage,” says Damien Field, senior lecturer at Sydney University’s Faculty of Agriculture and Environment. ”It’s a soil prized for potato production.”

Think milk and the south coast immediately springs to mind. ”Dairy cows originated out of places like Jersey and Guernsey,” Picton dairy farmer John Fairley says. ”They do better in cool climates. Which is not to say you can’t dairy farm anywhere else, but the south coast has traditionally done well in dairying. They have the climate, regular rainfall and good pasture.”

When Ridley Bell relocated from Victoria to northern NSW in 1979, it was in search of the ideal combination of rich soil and subtropical climate to grow blueberries. He found it at Lindenvale, between Lismore and Ballina, and thereby introduced a new horticulture industry to the region.

In the 1970s there was a lot of change in what was formerly dairy and pork country. Plantings of other new crops, such as avocado and macadamias, were greeted with scepticism. But decades on, both industries have proved themselves.

”There are very few places in Australia, or even the world, that have the all-important combination of subtropical weather, high rainfall, warm winter temperature and rich volcanic soil,” says Martin Brook, who, with his wife Pam, founded Brookfarm macadamia farm. The Brooks selected a property near Byron Bay and, with an understandable bias, believe the region produces the best-tasting nuts.

Another fairly recent horticultural innovation in Australia is the olive, which grows well in NSW.

”The regions growing olives don’t stop at borders,” says olive grower Robert Armstrong, from Crookwell, on the west-facing slopes of the Great Diving Range.

With about 30,000 hectares devoted to olives, Australia is a minnow compared with the world’s biggest oil producers, Spain and Italy, Armstrong says. But it’s the flavour and freshness of the oils produced here that counts. Armstrong credits the cold Crookwell nights for the robust flavours found in his Alto olives and oil.

Cold nights and frost are essential to growing good raspberries, which is why they do so well in the Southern Highlands.

Nicki and David Penn have been growing raspberries on their Cuttaway Creek farm near Mittagong since 2002. ”Dave’s father used to buy raspberries from this farm to make jam that he would bring to Sydney when he visited us,” says Nicki Penn.

What they don’t sell during the fresh raspberry season (February-March), they turn into vinegar, jams and sauces. All have picked up awards at the Sydney, Melbourne and Hobart Fine Food shows, testament to the quality of the raw ingredients and Nicki’s skill in the kitchen.

Jenny Bradley, a lamb grower from Armatree, north of Dubbo, is a member of the longest-running producer-owned co-operative in Australia, the Tooraweenah Prime Lamb Marketing Co-operative. She believes anywhere is lamb country. Along with beef farming, lamb producing has a long and proud history in NSW.

Peter Strelitz of Milly Hill Lamb agrees: ”We do lamb well throughout NSW – New England, Cowra, Wellington.”

Both producers cite genetics, management of soil and pasture and animal welfare as integral to producing good-quality lambs.

And what about seafood? The New South Wales coast, says consultant John Susman from Fisheads Seafood Strategy, is home to the oyster he considers the greatest on the planet, the Sydney rock. ”It’s unique in that it is grown all along the coast yet tastes different because it reflects the growing conditions in each region.”

Also on Susman’s most-wanted list are king prawns from northern NSW – close to the continental shelf where prawns thrive in the cold, deep water – along with school prawns and the eastern rock lobster.Outstanding in the field

Apples

From Batlow, Bilpin and Orange

Try Mirrabooka Farm, orangeapples爱上海同城论坛m.au

Blueberries

From Coffs Harbour and Northern Rivers

Try Mountain Blue Farms, mountainblue爱上海同城论坛m.au

Durum wheat

From Bellata

Try Bellata Gold durum wheat flour and semolina, bellatagold爱上海同城论坛m.au

Hazelnuts

From Mudgee and Orange

Try Australian Gourmet Hazelnuts, gourmethazelnuts爱上海同城论坛m.au

Lamb

From all over – New England, Cowra, Wellington and the north-west

Try Milly Hill Lamb, millyhill爱上海同城论坛m.au

Macadamia nuts

From Northern Rivers and Nambucca

Try Jelbonleigh Estate, jelbonleigh爱上海同城论坛m.au

Milk

From South Coast

Try Tilba Real Milk, southcoastcheese爱上海同城论坛m.au

Olive oil

From all over – Crookwell, Mudgee, Forbes

Try Rylstone Olive Press olive oil, rylstoneolivepress爱上海同城论坛m.au

Potatoes

From Robertson and Dorrigo

Try Highland Gourmet Potatoes. See Norm and Robyn at Pyrmont Growers’ Market

Raspberries

From cool climates such as Southern Highlands and Orange

Try Cuttaway Creek Raspberry Farm, cuttawaycreek爱上海同城论坛m.au

Sydney rock oysters

From Tweed Heads to Merimbula

Try Tathra Oysters, tathraoysters爱上海同城论坛m.au

Truffles

From Jindabyne, Southern Highlands and central west

Try Lowes Mount Truffiere, lowesmounttruffles爱上海同城论坛m.au

You can explore the best of NSW produce at the NSW Food and Wine Festival – nswfoodandwine爱上海同城论坛m.au.

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Bumper profits push market to higher close

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A strong interim profit result from Australia’s biggest resource company, BHP Billiton, has lifted the local stock exchange, offsetting some earnings disappointments.

The benchmark S&P/ASX 200 Index rose 9.9 points, or 0.2 per cent, on Tuesday to 5392.8, while the broader All Ordinaries Index added 0.1 per cent to 5402.2, as investors focused on a mixed bag of half-year company earnings reports.

There was no overnight lead from Wall Street, after markets in the United States were closed on Monday for the President’s Day public holiday. In the afternoon session a spike in Japan’s Nikkei following comments from the Bank of Japan was positive for sentiment.

Shares and the dollar were both supported by the release of minutes from the Reserve bank of Australia’s February policy meeting, which confirmed the central bank is likely to keep the official cash rate on hold at its record low of 2.5 per cent for many months.

BHP Billiton gained 2.3 per cent to $38.89 after beating expectations with a 69.4 per cent rise in interim net profit compared to the first half of last financial year. The company also continued to reduce costs and improve cashflow.

The resources giant did not lift its interim dividend by as much as some in the market had hoped, however, the chief executive Andrew Mackenzie flagged investors can expect higher capital returns at the end of the year.

“It is still early in reporting season, but so far most results from the large caps have been well received with share prices getting a lift,” Invesco Australia portfolio manager Nicole Schuderl said.

“Returning cash to shareholders is likely to remain a major focus as reporting season continues,” Ms Schuderl said. “Reducing costs will also continue as another area of focus, especially for mining and resources companies.”

Mining was the best-performing sector, up 1 per cent, boosted by the BHP result and strong iron ore and coal prices.

Rio Tinto rose 1.9 per cent to a near 12 month high at $70.88 as the spot price for iron ore, landed in China, rose for the fourth day in a row to $US124.40 a tonne.

The big four banks were split. Commonwealth Bank of Australia rose 0.2 per cent to $74.53 despite trading without the right to its $1.83 interim dividend on Monday.

Westpac Banking Corporation dipped 0.2 per cent to $32.86, ANZ Banking Group rose 0.1 per cent to $31.64, and National Australia Bank gained 0.8 per cent to $35.04 ahead of providing a quarterly update later in the week.

Telstra Corporation rose 0.2 per cent to $5.23. It was reported the telecommunications giant is set to axe 400 jobs from its Sensis directories business later this week.

Coca-Cola Amatil lost 5.3 per cent to $11.22 after departing chief executive Terry Davis delivered the company’s weakest profit result in nearly two decades. Slimmer profit margins on soft drinks and a $400 million write-down on fruit canning business SPC Ardmona contributed to a 82.5 per cent slump in interim net profit.

Packaging company Amcor fell 4.2 per cent to $10.33 despite showing interim net profit rose 21.9 per cent and flagging up to $2 billion worth of possible acquisitions.

Expectations for contractors to the mining and energy industry are low this reporting season due to a slump in demand from new projects. Three resource services companies surprised the market with better than expected interim results.

Monadelphous Group was the best-performing stock in the ASX 200, climbing 9.7 per cent to $17.10 after reporting a record half-year profit of $87.1 million, up 10.1 per cent on the previous corresponding period. MacMahon Holdings added 12 per cent to 14¢ after showing a new Mongolian contract helped it return to profitability in the half-year ended December. RCR Tomlinson rose 2 per cent to $2.98 after posting a 14.2 per cent increase in interim net profit and upping its interim dividend.

Other stocks that advanced following the release of half-year results included Challenger Ltd and Sirtex Medical.

Financial services group Challenger Ltd rose 3.3 per cent to a record $6.61 after showing a 25 per cent rise in interim net profit compared to the previous corresponding period.

Drug developer Sirtex Medical added 3.8 per cent to $14.96 after showing a 43.6 per cent rise in interim net profit. The company said results of a clinical trial into the broader application of its radioactive liver cancer treatment that were due for release in 2014 have been delayed until early 2015.

Pacific Brands was the worst-performing stock in the ASX 200, dumping 9 per cent to 65.5¢ after reporting a net loss of $219 million for the first half of fiscal 2014, compared to a $38.9 million profit in the previous corresponding period. The company sells iconic Australian clothing and footwear labels including Bonds, Volley, and Stubbies. Sales were up for the first time in five years but a $252 million write down linked to its struggling workwear division slugged the bottom line.

Other stocks that declined following the release of interim reports included Sonic Healthcare, Seven West Media, Asciano, and Arrium.

Pathology and radiology clinic operator Sonic Healthcare dipped 0.5 per cent to $16.90 despite narrowly beating analyst expectations for interim net profit.

Seven West Media lost 1.8 per cent to $2.14 after showing interim revenue dipped 1.1 per cent.

Asciano dipped 0.4 per cent to $5.74 after unveiling plans to merge its coal haulage and rail freight divisions as it reported a 4 per cent slip in first-half net profit.

Arrium (formerly OneSteel) fell 2 per cent to $1.75 despite interim net profit rebounded to $220 million, up from a $448 million loss in the previous corresponding period that had featured hefty write-downs.

Transport and logistics company McAleese crashed 34.6 per cent to an all time low of 72¢ after emerging from a trading halt to warn the market it now expects a $37.9 million loss for the current half-year period due to troubles with its Cootes Transport division. The stock debuted at $1.47 in November.

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Australian Jana Pittman ready to contest the bobsled with Astrid Radjenovic

Jana Pittman is happy, because this time there is no Jana Drama.
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Remember that? Jana Drama?

That’s the force of nature that often comes in like a bitter cold front before every major competition she ever competed in as a 400 metres runner.

Normally, the Jana Drama involves injuries. How many of those have we ridden with her?

From the blown knee cartilage before the 2004 Olympics in Athens and the sight of her being pursued by the media pack as she hobbled around on crutches, to the toe injury that kept her away from Beijing four years later, to another foot injury that finally ended her athletics career before London four years after that.

The Jana Drama was hard for Jana Pittman to ignore after she completed her final training session with Astrid Radjenovic in the women’s two-man bobsled in Sochi on Sunday morning.

”The biggest thing for me is that I got here injury free,” she said on a cold morning at the Sanki Sliding Centre. ”I lost the last two Olympics because of injury. Actually, it’s the last three. To be able to finish the last training session and know I am putting my spikes on in two days time, with nothing wrong, is phenomenal. So I’m very grateful for this lady.”

She says this pointing to Radjenovic, who has often been the forgotten part of Pittman’s incredible comeback story that will see her become the first female athlete to compete at the summer and winter Games for Australia.

Asked if she is surprised to be reflecting on her former, drama-filled life as a track athlete, she said: ”I can’t not. We’re at the Olympics. I’m pretty lucky. I’ve been given a real gift and a second chance. I’ll carry that with me for the rest of my life. Even if I never go to another Olympics, to finish on a high together would be great. It doesn’t matter what the result is. The fact that we got here after all we’ve been through in the last year, and what this one [Radjenovic] has done for seven years, it’s just fantastic. I could retire happy if I did.”

Of course, the Jana Drama extends beyond the injuries.

From fallouts with former relay team member Tamsyn Lewis, to her on-again-off-again-on-again-off-again relationship with English athlete Chris Rawlinson that was dragged through the women’s magazines, to stories about her removing breast implants to improve her athletic career.

The Australian public, which can be as fickle and dramatic as she could be, fell out of love with Pittman very quickly.

In an interview with ABC Radio in 2011, she admitted: ”You know, I have made so many mistakes and so many of them have been written out, you know, through the public. You know, boobs in, boobs out, divorced, remarried, divorced. Like it’s, it’s quite comical when I look back on it really … So I guess the situation is that I’m the bad girl and that’s it.”

The shame of it is beneath the Jana Drama lies a pure athlete called Jana Pittman, who has as much defiance and ability as any we’ve seen.

In 2003, at the age of 20, she was the youngest person to win the world championship in the 400 hurdles. She won it again in 2007. If not for injury, an Olympic gold medal would likely be hers, given her ability in the event.

When she abandoned athletics, she tried her hand at boxing and rowing, and then bobsleigh.

In her role as brakeman, she does most of the heavy pushing at the start.

She has subsequently whacked on 11 kilograms thanks to the combination of heavy lifting and more than enough protein shakes, meat and carbs to fuel a footy team. The result: she has the legs of an NFL linebacker.

”You eat for Australia,” she laughed.

Don’t go expecting medals, Australia, from Pittman and Radjenovic, although they finished ninth in their final training session.

”We’re realistic,” says Radjenovic. ”Tenth to 15th is where we would plan to finish. We could sneak into the top 10 if we have a great few days. We’ll wait and see.”

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What Coke needs now is more spritz

Illustration: John Spooner.After 12 years at the helm of Coca-Cola Amatil, Terry Davis will deliver his swansong on Tuesday with hundreds of millions of dollars expected to be written off his beleaguered SPC Ardmona acquisition.
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It comes days after he managed to stitch together a $22 million deal with the Victorian government to keep SPC Ardmona from sinking.

Davis would have hoped for a more upbeat profit result, given it will be his last, but the market had changed and he ran out of time.

Instead of leaving the write-downs to his successor, Alison Watkins, who joins next month, Davis will do it himself. Between $400 million and $500 million could be written off SPC and other underperforming businesses. Davis bought SPC for $650 million, along with some other services businesses.

The write-downs, a weaker dollar and some big private label contract wins from Woolworths and Coles will give SPC a standing start when Watkins takes the reins.

But on Tuesday Davis will be left to report a set of 2013 results that are lower than last year’s. In a trading update last year he warned that earnings could be between 5 and 7 per cent lower than last year’s.

While some of the slump in earnings can be blamed on SPC, some is due to structural changes that need to be dealt with.

To put it into perspective, the latest Nielsen results reveal that CCA’s soft-drink category, water and sports/energy drinks were all down during a very warm summer. According to a report by Deutsche Bank, CCA underperformed in the soft-drinks category in the December quarter in volume and value. In water, Water CCA declined 1.8 per cent in the face of strong category growth, which was up almost 9 per cent, due to private label share gains. The group’s sports/energy sales dived 5.3 per cent. “We remain cautious that the persistent volume weakness is structural,” Deutsche says.

For investors, the results will be a side issue as they wait to see how Watkins can grow the business, and the executives who report to her.

One executive expected to depart sooner rather than later is Warwick White, the head of the group’s Australasian business, who has spent more than 28 years in the global Coca-Cola system and who got pipped by Watkins for the top job. This column speculated last week that he is a contender for the top job at Treasury Wine Estates.

Watkins is well regarded and highly credentialled but growing CCA will be challenging, as Davis knows, having generated double-digit growth for eight of his 12 full-year profit reports. The longer he was there, the harder it got.

CCA is now back in beer, albeit in a small way. How that will pan out is anybody’s guess given the beer industry is becoming more competitive as the big two players, Lion and Carlton & United Breweries, continue to dominate, the supermarkets have the power to negotiate down on prices and there has been a surge in craft beer operators.

CCA’s Australian business – which is the lion’s share of the operation – is mature and is in desperate need of a new product to breathe new life into a set of products facing savage competition from Pepsi, which has been selling products at up to 50 per cent lower in the supermarkets, and, as health becomes an issue among Australian consumers, sugary drinks will be swapped for healthier drinks.

What CCA is desperate for is a new product from The Coca-Cola Company (TCCC), which can lift its growth. Unfortunately for CCA, this has been a long time coming, with Coke Zero the last successful product released in 2007.

CCA is an anchor bottler for TCCC, which holds 30 per cent of CCA’s shares. This means there is a tension within the relationship, where TCCC wants volume to be the endgame, while CCA is more focused on profit margins.

For now CCA’s growth market is Indonesia, but it is still early days and it will require some heavy spending in capital expenditure to develop the market.

There is always the risk of its relationship with TCCC turning sour. There has long been speculation there is ”constructively discontent” and that TCCC would like to acquire the Indonesian Coca-Cola licence and business back from CCA or find a partner such as Mexican bottler Coca-Cola FEMSA. The speculation intensified in December when TCCC sold 51 per cent of its Philippines bottler to FEMSA.

Whatever the speculation, CCA has done a good job in Indonesia, generating earnings before interest and tax of $102 million for 2012, up 16.8 per cent and growing volume more than 10 per cent.

If its earnings in Indonesia are worse than its trading update suggested, it could put renewed pressure on its relationship with TCCC.

But that is where Watkins can weave her magic.

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Car industry fallout ‘already here’, says condom maker Ansell

No protection: automotive manufacturing pain is laready being felt in the wider economy.The demise of car making in Australia is already causing pain in the wider economy, as Ansell chief executive Magnus Nicolin says the automotive manufacturers and their suppliers have begun to cut back on purchases of the protective equipment it supplies.
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Australia was one of the weaker markets that dragged back Ansell’s underlying revenue growth to just 1 per cent in the December half.

Mr Nicolin said the looming exits of Ford, General Motors and Toyota in 2016 and 2017, and a slowdown in the mining sector, mean that ”Australia is taking a bit of a beating”.

”Even though the [automotive] shutdowns are not going to happen until 2016, 2017, volumes have not been impressive,” he said. ”The manufacturing sector in Australia has been relatively weak over the last six to nine months. That’s obviously having an indirect impact on us.”

Australia accounts for 6 per cent of Ansell’s sales, which were boosted by acquisitions to rise 9 per cent to $US703.6 million ($777.2 million) in the six months to December 31. Ansell shrugged off patchiness in the global economy to report a 14.9 per cent rise in interim net profit to $US65.6 million, just missing consensus of $US67.4 million. Earnings before interest and tax rose 20 per cent to $US82.7 million.

UBS analyst Andrew Goodsall described the result as ”soft” and underlying growth as ”uninspiring”. But he said improved trading towards the end of the half and the contribution from January 2 of US disposable glove maker BarrierSafe International, which Ansell acquired for $US615 million in November, meant the company should meet its full-year guidance. Ansell’s share price fell 5.1 per cent to $18.31 on Monday, off a 12-month high of $22.08 in September 2013.

Surgical sales within the medical division were a strong performer. Sales of synthetic gloves in the segment rose 23 per cent to $US29 million, off the back of a new range that Ansell first started developing three years ago.

The sexual wellness unit, which sells condoms, was the weakest division. Mr Nicolin blamed a change of distributors for some of the 5 per cent fall in sales of branded condoms, to $83 million, as new customers delayed purchases until old distributors had destocked.

Ansell declared an unfranked dividend of US17¢ a share, to be paid on March 25. The dividend is 1¢ higher than the previous corresponding period, when it was paid in Australian dollars at 16¢.

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