press digest-australian business news - feb 28

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    PRESS DIGEST-Australian Business News - Feb 28
    07:16, Monday, 28 February 2005

    (Compiled for Reuters by Media Monitors)

    THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

    The A$18 billion food and liquor division of retailer, Coles
    Myer , will undergo a significant restructuring of senior
    management from March 1 under the direction of Hani Zayadi, who
    took charge of the division in December. Mr Zayadi took over
    following the sudden departure of Steven Cain, who had been
    recruited from the United Kingdom only one year earlier. Coles
    Myer is still negotiating a separation package with Mr Cain, who
    intends to stay in Australia. Page 12.

    --

    National retailer, Woolworths , has appointed
    executive search firm, Korn Ferry, to evaluate possible
    successors to chief executive, Roger Corbett. Woolworths
    chairman, James Strong, said yesterday the board felt there were
    some excellent internal contenders for the job, but 'being in
    search mode' also meant looking externally. Woolworths is
    expected to report today that first-half net profit was in the
    region of A$450 million, a 12-13 per cent increase over the
    previous first-half. Page 12.

    --

    Affinity Health is now looking to its listing on the
    Australian Stock Exchange after last week reporting a maiden net
    profit of A$13.2 million for the December half-year. The
    previous December half saw a loss of A$14.8 million. Affinity's
    senior management is reported to be drafting a growth strategy
    based on doubling the company's Asian presence, initially by
    owning and operating hospitals in India and Malaysia. Page 12.

    --

    Telecommunications leader, Telstra , has hired
    management consultants, McKinsey & Co, to assist it in
    formulating a view of the regulatory environment that should
    operate after privatisation. Although Telstra has resolved its
    main disputes with the Australian Competition and Consumer
    Commission major differences remain about the future environment,
    particularly on price caps and mobile call charges. Page 12.

    --

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

    Telstra will today launch an intensive three-month campaign
    in support of its third-generation (3G) mobile phone services.
    The company is reported to have a A$5 million advertising
    strategy covering television, press, billboard, cinema and
    online. Telstra is using the Japanese software platform, i-mode,
    to support its 3G content services, offering 200 sites. Content
    and applications will be key differentiators in the 3G market,
    according to Macquarie Equities analyst, Tim Smart. Page 31.

    --

    The sharemarket will be bracing today for the first rise in
    official interest rates for 15 months. The board of the Reserve
    Bank of Australia is widely expected to approve a rise of 25
    basis points tomorrow and to announce the decision on Wednesday
    morning. The latest national accounts, to be released shortly
    afterwards, are expected to show that the economy grew by less
    than 2.5 per cent in 2004. Page 32.

    --

    Citigroup Australia is replacing Alan James as head of
    investment banking as it seeks to improve its position in an
    increasingly competitive market. Citigroup ended last year
    fourth in announced merger and acquisition activity, handling
    business worth A$36 billion, according to the Thomson Financial
    rankings, but the rankings were distorted by the huge merger of
    the Westfield property trusts, in which all the investment banks
    shared. Mr James has been offered another role in Citigroup.
    Page 33.

    --

    Analysts and industry sources are convinced that New Zealand
    dairy co-operative, Fonterra, will increase its takeover offer
    this week for Australian dairy producer, National Foods .
    Under Australian Stock Exchange rules, Fonterra has until 5pm
    tomorrow to make any changes to its offer of A$5.45 a share for
    National Foods, launched in October. Philippines brewer, San
    Miguel Corp, offered A$6 a share in December and the consensus
    view now is that Fonterra will offer a cautious A$6.05, valuing
    National Foods at A$1.78 billion. Page 33.

    --

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

    Australia's biggest supermarket group, Woolworths, will
    report its interim results today, with analysts forecasting a net
    profit of between A$415 million and A$463.7 million for the six
    months to December. Woolworths' sales from continuing operations
    during the period increased by 9.3 per cent to A$16.4 billion on
    a comparable 28-week basis, and analysts will be focussing on
    margins, with particular attention on the food and liquor
    business. Page 30.

    --

    Sections of manufacturing industry are being squeezed
    severely by the big rises in steel prices and the difficulties of
    obtaining supplies. Bruce Griffiths, chief executive of car
    parts maker, Air International, said he now had employees working
    full-time to try to source steel supplies but was still
    struggling. Roger Brown, executive chairman of ARB Corp, which
    makes four-wheel drive accessories, said steel prices 'went
    ballistic' in the December half. 'They rose around 50 per cent
    in six months, and you just can't pass it on,' he said. Page 30.

    --

    The boards of Sydney's thoroughbred race clubs, the Sydney
    Turf Club and Australian Jockey Club, meet separately today to
    decide whether to accept a non-exclusive broadcast deal with Sky
    Channel, the television subsidiary of gaming group, Tabcorp
    . The clubs have joined with Victorian metropolitan
    race clubs to form rival broadcaster, ThoroughVisioN (TVN), which
    is seeking exclusive rights to metropolitan race meetings. Page
    31.

    --

    Australian Foundation Investment Co (AFIC), which has A$3.5
    billion in assets, will stick with the big resource companies
    because they will be 'survivors' when boom times end, AFIC
    chairman, Bruce Teele, said yesterday. 'You may not get the
    price correct, but we're interested in the BHPs, the Rio Tintos
    and the Aluminas because whatever happens when the music stops,
    we think they'll still be strong, sustainable companies.' Page
    31.

    --

    BHP Billiton is believed to be holding out
    for a substantially better price rise for its iron ore than the
    71.5 per cent negotiated with Japanese steel mills by the other
    major suppliers, Rio Tinto and CVRD, of Brazil.
    A BHP source surprised on Friday by telling The Sydney Morning
    Herald that 'negotiations are continuing,' despite the announced
    contracts by the other companies. BHP is reported to be arguing
    that steel makers should recognise the freight advantage in
    buying from Australia rather than Brazil. Page 32.

    --

    THE AGE (www.theage.com.au)

    The latest quarterly survey results from Market Intelligence
    Survey Centre indicate a marked restructuring of the mortgage
    broking industry, with the number of loans written by brokers
    falling seven per cent, year-on-year, in the September quarter.

    The number of active brokers writing loans fell 42.5 per cent
    to 351 in the quarter, and the big four banks increased their
    share of broker-written loans by three per cent, largely at the
    expense of credit unions and building societies. Page 10.

    --

    Rail freight company, Pacific National, has strongly denied
    claims by trucking group, Linfox, and Queensland Rail (QR) that
    it is denying them access to Melbourne's Dynon rail terminal.
    Pacific National's general manager commercial, Robert Jeremy,
    said yesterday that, as agreed with the Victorian Government last
    year, QR had been offered capacity for 50,000 containers, 'but
    they haven't responded.' Page 10.

    --

    Medical technology company, Sirtex , has failed to
    achieve a hoped-for rise in U.S. sales, reporting an increased
    net loss for the half-year to December. Sirtex said on Friday
    that the loss was A$781,000 compared with A$180,000 in the
    previous December half. Chairman and chief executive, Bruce
    Gray, said that although US sales of its liver cancer treatment
    had not met internal expectations, there were 'positive signs'
    for growth emerging. Page 11.

    --

    Federal Treasurer, Peter Costello, said yesterday that
    Australia's low level of inflation should keep interest rates
    down, but stopped short of anticipating whether official rates
    would rise this week. ANZ Bank chief economist, Saul Eslake,
    said he expected the official cash rate to increase by 0.25 of a
    percentage point this week and by the same amount next month.
    The Australian Bureau of Statistics will publish the December
    quarter national accounts, expected to reflect slower economic
    growth, on Wednesday. Page 12.

    --

    Standards Australia (SA), which sets safety and environmental
    standards for equipment and other products, last week sold 30
    million shares in its international subsidiary, SAI Global, at
    A$2.20 a share. The transaction leaves SA with A$180 million of
    assets including shares, government bonds, managed funds and real
    estate. SA chief executive, John Tucker, said the company would
    diversify its investment portfolio, particularly towards
    international equities. Page 12.
    --

    Looking for more information from local sources? Factiva.com
    has 112 Australian sources including the Australian Financial
    Review.

    ((Reuters Sydney Newsroom, 61-2 9373 1800,
    [email protected]))

    (c) Reuters Limited 2005
    REUTER NEWS SERVICE
 
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