around the traps ... with the ferret

  1. 4,756 Posts.
    Around the Traps ... with THE FERRET
    07:32, Friday, 28 January 2005

    Sydney - Friday - January 28: (RWE Australian Business News) -

    WOOLWORTHS (WOW) announced another stellar sales performance
    yesterday and the market loved it, lifting the stock 34c to $14.79.

    The shares had drifted lower in recent weeks, from the record
    $15.18 on December 23 to as low as $14.31 on Monday.

    But investors are only ever looking for new reasons to buy and
    yesterday's announcement delivered.

    Sales rose 9.3 per cent in the first half and given the
    continuance of the current trading patterns for the first half, and the
    maintenance of the present business and economic climate, Woolworths
    expects sales from continuing operations for the full year to grow in
    the "upper single digits" (they can't get much "upper" than they are

    Net profit is increasing at the rate of 10 to 15 per cent.

    The first-half result will be announced on February 28 when the
    retailer will also provide an updated earnings guidance for the full
    year (including Bruandwo, which has taken over Aust Leisure).

    Woolworths is heading for EPS of around 77c so the latest price
    represents a a forward p/e of 19, which is well above average but not
    bad for the retailer.


    Back in October the chairman of UNITED GROUP (UGL), Trevor
    Rowe, was exercising his bragging rights at the annual meeting.

    He said that over four years revenues increased by 42 per cent,
    net profit more than 170 per cent, share price more than 400 per cent
    and market capitalisation more than 500 per cent.

    The shares were $5.10 on June 30 balance date and $6 on the day
    of the meeting.

    The upwards spiral resumed yesterday when the shares rose 32c
    to $6.82.

    This followed news the rail engineering, manufacturing and
    maintenance business, United Goninan, is benefiting from a strong
    resources sector with almost $110 million in new orders for freight
    wagons and the supply of locomotives.

    Group managing director and CEO Richard Leupen said the
    resource sector continued to show very strong activity, and the group's
    rail operations were benefiting.

    "The Chinese market is clearly a growth driver and we expect
    this to continue in 2005 and 2006," he said.

    "United Group is currently experiencing a record level of
    bidding activity in the rail freight sector and our manufacturing
    facilities are operating at near full capacity.

    "While the iron ore market is strong, we are also witnessing
    increased demand for our services from customers in the coal sector,
    particularly in the eastern states."


    ALESCO (ALS) didn't let its backers down after four rises in a
    row from $7.78 to $8.17 in anticipation of the half-yearly result.

    Net profit in the six months to November 30 was up 23.4 per
    cent and interim dividend from 15c to 20c.

    The shares rose a further 19c to $8.36 before closing at $8.32.

    The company expects trading conditions to remain at
    satisfactory levels for the second half.

    It expects earnings per share growth about 15 per cent.

    This should give Alesco about 50c for the year, which puts the
    stock on a forward p/e of more than 16.


    ARAFURA RESOURCES (ARU) rose 2.5c to 20c after announcing the
    mineral resource at Nolans Bore contained about 1800 tonnes of uranium
    oxide, but slipped to close at 18c.

    Arafura did its best to stir up interest.

    It said that based on these resource estimates and using the
    current market value of uranium and current $US/$A exchange rate, the
    contained value of uranium was about $105 million.

    Arafura has less than 28 million shares on issue so that
    estimate equates to almost $4 a share.

    As Arafura says, the value of the contained uranium
    substantially increases the commercial value of the Nolans Bore deposit
    but it hasn't done much for the shares.


    You have to keep your wits about you wading through all these
    quarterly reports from mining companies.

    For example, NEWCREST (NCM) said its Kencana gold deposit at
    Gosowong in Indonesia would extract "1.6Moz" over four years and the
    production rates will be at or above "350 Kozs p.a.".

    We sussed the company meant M as in million and K as in

    Next, ALUMINA (AWC) released a statement by Alcoa on its Ghana
    plans saying the MOU called for the initial restart of three of the
    five existing potlines, "representing 120,000 mtpy".

    Well, we reckoned that was "m" as in million, like Newcrest,
    but "py" as in per year, which was unlike Newcrest's Latin "pa" or "per

    But hang on, 120,000 million tpy would be ridiculous and ...
    phew! ... we eventually woke up to the fact that "m" here is "metric".

    Then we stumbled upon CENTENNIAL COAL (CEY).

    At Mandalong production will be increased to an annualised rate
    of 3.5 mtpa.

    Now if it were "metric" it would be ridiculous and it's back to
    "million" ... and it's back to Latin as well.


    The STOCKLAND (SGP) announcement came with two contact names at
    the bottom.

    One with the title of "EGM Corporate Affairs" and the other "GM
    Investor Relations".

    Hmmm, we wonder what the initials stand for ... Extraordinary
    General Meeting perhaps ... or General Motors?

    The other day we received a twee gift of mustard made in Milawa
    in the northwest wine region of Victoria and it had "GM Free" written
    on the lid.

    Is that a clue?

    Oh, well.

    Despite the double act Stockland managed to not only get the
    tense wrong, but may have achieved a double ambiguity when it
    "announced it will extend its offer to buy all Units in General
    Property Trust for 0.608 Stockland Securities for one month".

    (Comments and complaints to [email protected] - no requests
    for advice please.)


    Copyright © 2005 RWE Australian Business News. All rights reserved.
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.