Grocery retail giant Woolworths Ltd
(ASX:WOW) is to enter into the $24 billion hardware sector by making an offer for Australia’s second largest hardware distributor Danks Holdings.
Woolworths, in a joint venture equity agreement with leading U.S. home improvement retailer Lowe’s, has made an offer of $13.50 a share, valuing the company at $87.6 million, and will also pay a 53 cent dividend per share.
The Danks Board has unanimously recommended that its shareholders accept the offer.
Woolworths CEO Michael Luscombe says the existing home improvement sector in Australia is under-serviced and the company believes there is an opportunity to bring competition and grow the sector.
Mr Luscombe says there is a real opportunity to increase the overall size of the sector and this significant new distribution and retail investment should be positive for both customers and the industry alike. Woolworths recorded net profit of $1.6 billion in 2008.
Financial Services group Suncorp-Metway Ltd (ASX:SUN) has announced a 40 per cent fall in net profit after what the company says has been the most volatile period in Australian financial services history.
Net profit for the year to June 30 came to $348 million inline with guidance issued earlier in the month of profit between $340 million to $360 million. The company’s banking division reported earnings of $117 million down 82 per cent on last year after incurring an impairment charge of $710 million.
Suncorp’s insurance arm lost $255 million to insurance payouts related to the Victorian bushfires and Queensland floods.
The insurance arm’s trading result was $462 million down from $607 million in fiscal 2008.
Chairman John Story says that while the company sees external conditions stabilizing and there has been some evidence of recovery it is still too early to declare the end of the uncertainty.
New CEO Patrick Snowball will start his appointment on the first of September.
Suncorp declaredstabilising a final dividend of 20 cents a share. Suncorp-Metway’s 2008 net profit nearly halved from its result the year before.
Brewer Foster’s Group Ltd (ASX:FGL) has reported a 4 per cent rise in full year profit today, thanks to higher beer volumes offsetting a decline in wine earnings.
Net profit for the year to June 30 came to $741.5 million, up from $715 million the year before.
The company says the Australian beer market remains very robust with beer sales revenue up 5.3 per cent, however global wine pre-tax earnings fell 7.3 per cent hit by a slump in consumer demand as a result of the global recession.
In the June quarter Foster’s restructured and separated its Australian beer and wine divisions in an effort to improve the performance of its wine business.
Foster’s says trading conditions in key wine markets will remain challenging in 2010 due to the impact from recessionary economic conditions. Foster’s Group’s profit’s have been declining over the last couple of years.
