A positive lead from Wall Street has the Australian share market higher as most miners recovered some of yesterday’s losses. At noon, the market is 0.36 per cent higher.
The S&P/ASX 200 index is 19 points higher at 5,313. On the futures market the SPI is 19 points higher.
Company news
Metcash Limited
(ASX:MTS) has announced it will invest nearly $700 million over the next five years in a transformation plan as it faces increased competition from Coles and Woolworths.
The retail, wholesale distribution and marketing company downgraded their profit outlook after market close yesterday and shares in the company plunged over 11 per cent in early trade.
Chief executive Ian Morrice said the strategy is designed to facilitate long-term sustainable growth for Metcash and its customers by growing sales and improving efficiency. Elements of the strategy such as discounting are already in place.
Central to the plan is a proposed transformation of the Food and Grocery division with the company allocating $100 - $125 million to fund store refurbishments, new stores and store buybacks, as well as $160 – 180 million for supply chain transformation.
The plan will largely be funded by a reduction in dividends. Earnings per share in the year ending April were expected to fall 13 per cent to 15 per cent. Earlier guidance had predicted “high-single digit” decline in underlying earnings per share. Shares in Metcash are trading down 9.68 per cent at $2.85.
WDS Limited
(ASX:WDS) has announced it has signed a Field Development and Operations Construction Master Services Agreement with Arrow Energy for Arrow’s Domestic Gas requirements. Arrow Energy has a sizeable domestic gas business and supplies gas to Braemar, Braemer 2, Daandine and Townsville Power Stations as well as two mineral refining facilities in North Queensland.
The contract will be a joint venture with China Petroleum Engineering & Construction Corporation (CPECC). The JV will include the provision of wellhead surface infrastructure, installation of associated gas distribution lines and civil construction and maintenance works.
The term of the Agreement is 2 years with an option to extend for a further 1 year. The initial anticipated value of the contract will be $40-80M over the first 2 year period. Shares in WDS are trading up 5.16 per cent at $1.12.
The best and worst performers The best performing sector is Materials gaining 85 points to 9,836. Shares in Independence Group
(ASX:IGO) have risen 8.40 per cent and trading at $4.13. Shares in BlueScope Steel Limited
(ASX:BSL) and Resolute Mining Limited
(ASX:RSG) are also stronger.
The worst performing sector is Consumer Staples, falling 31 points to 9,762.5. Shares in Metcash Limited
(ASX:MTS) have fallen 9.68 per cent, trading at $2.85. Shares in Treasury Wine Estates Limited
(ASX:TWE) and Goodman Fielder Limited
(ASX:GFF) are also lower.
Gold and the dollar
Gold is trading at $US1,331 an ounce.
The Australian dollar is buying $US0.9049.
