Following mixed leads from overseas markets and a lacklustre outlook for food retailer Woolies , the Australian share market opened lower and has since enjoyed a mild recovery to be just 0.1 per cent down at noon.
The S&P/ASX 200 index is 5 points down at 5,904. On the futures market the SPI is 4 points higher.
Company news
Grocery giant Woolworths Limited
(ASX:WOW) has slashed its profit outlook and reported major changes to its management structure. Guidance was cut to just 1.8 per cent growth from 4-7 per cent originally as the food retailer announced an executive reshuffle which will see the current MD of supermarkets Tjeerd Jagen, depart the firm. Profit for the six months came in at $1.38 billion, a near 5 per cent increase on last year but CEO Grant O’Brien said additional flexibility around the outlook was needed to deliver on long term plans for the company. Shares in Woolies were savaged in morning trade down 8.97 per cent at $30.91.
Graincorp Limited
(ASX:GNC) also touted a downturn in profit signalling full year earnings could be as much as 50 per cent lower on the back of lower grain production and stalled exports. Dry conditions are affecting northern and eastern Australia with lower grain volumes hurting the bottom line of rail contracts that have to be locked in on large volumes. The outlook for is for underlying net profit of $45 - $60 million compared to $95 million last year. Shares in Graincorp have recovered a little to be trading down 3.67 per cent at $9.70.
Best and worst performers
The best performing sector is industrials gaining 1 per cent to 4,604. Shares in Spotless Group have risen 3.23 per cent and are trading at $2.08. Shares in SAI Global and Qantas are also stronger.
The worst performing sector is consumer staples, falling 4.6 per cent to 9,576. Shares in Woolies are down sharply in morning trade. Shares in Asaleo Care and Graincorp are also lower.
Gold and the dollar
Gold is trading at $US1,211 an ounce.
The Australian dollar is buying 78.12 US cents.
