Territory Stories

The Northern Territory news Thu 10 Apr 2014



The Northern Territory news Thu 10 Apr 2014

Other title

NT news


The Northern Territory news; NewspaperNT




This publication contains may contain links to external sites. These external sites may no longer be active.




Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin

Publisher name

News Corp Australia

Place of publication


File type



Copyright. Made available by the publisher under licence.

Copyright owner

News Corp Australia



Parent handle


Citation address


Page content

THURSDAY APRIL 10 2014 BUSINESS 31 V1 - NTNE01Z01MA South African giant has bold vision for DJs SYDNEY: South African retailer Woolworths believes it can turn around David Jones within five years, after launching a $2.15 billion takeover bid for the department store. The company (unrelated to its Australian namesake), believes it can almost triple David Jones profitability, adding more than $130 million to its bottom line per year by 2019. We can transform this business, said Woolworths chief executive Ian Moir. David Jones announced the surprise takeover move yesterday and recommended its shareholders accept Woolworths $4 per share offer, which is 25 per cent more than DJs shares were trading at prior to the announcement. The deal is subject to approval from shareholders and federal Treasurer Joe Hockey, and Mr Moir says Woolworths will walk away from the deal if it isnt able to acquire 100 per cent of David Jones shares. We will get either 100 per cent or we will get nothing. The deal destroys rival department store Myers hope of a merger of equals with David Jones, and the company announced it had withdrawn its proposal on Wednesday. But IG market strategist Evan Lucas said the Woolworths deal was good news forboth David Jones and Myer shareholders. He said the price offered by Woolworths would be attractive to David Jones shareholders given its poor performance in recent years, while Myer investors would be relieved to have avoided what many saw as a bad deal. They have been released from something they didnt need to be in, he said. It would have diluted their share price it was messy. He also said a turnaround on the scale Woolworths was talking about is possible, given Mr Moirs track record, including as chief executive of Woolworths subsidiary Country Road. Ian Moir knows the Aus tralian retail landscape a lot better than many people realise, Mr Lucas said. Woolworths believes there is substantial scope to turn around David Jones performance, starting with an increase in the department stores use of private label merchandise products carried under DJs own brand, which typically boast higher profit margins. Under the plan, private label products will make up about 30 per cent of David Jones merchandise and the department store will also carry more from Country Road. Will you see more South African brands and more Country Road? Yes you will, he said. Woolworths also has plans to boost David Jones online sales and to attract more cus tomers through the use of loyalty cards. Mr Moir said the merger, which would create the second biggest department store business in the southern hemisphere, would allow the company to compete better in Australia and South Africa. Its a win-win situation not only for our shareholders, we believe its a win-win situation for our customers in South Africa and our customers here, Mr Moir said. When we add these two businesses together, the scale that we create is going to allow us to get really competitive pricing into play in both of these markets.. David Jones shares finished yesterday up 72 cents to 3.91, while Myer climbed nine cents to $2.39. By EVAN SCHWARTEN We will get either 100 per cent or we will get nothing Woolworths South Africa Group CEO Ian Moir believes the company can almost triple David Jones profitability Picture: ROSS SCHULTZ Eager to snap up homes but gloom hard to budge CANBERRA: People may be clamouring for a mortgage but buying a home is not lifting their spirits. Mortgage lenders had one of their busiest months in about four and half years in February, with 52,460 home loans granted. However, other data released yesterday showed con sumer confidence had barely risen in April and sentiment actually fell among people with a mortgage. This was despite the Reserve Bank keeping the cash rate stable, ongoing positive news on the housing market and a sharp 47,300 rise in employment in February. Westpac chief economist Bill Evans described the mere 0.3 per cent rise in April consumer sentiment as a mild surprise, when a larger recovery was expected to counter a near 10 per cent drop since November. It left the Westpac-Melbourne Institute consumer sentiment index at 99.5 points and below the key 100 level that indicates there are more optimists than pessimists. It is expected that todays labour force figures for March will be crucial to determining consumer mood and future spending behaviour. The International Monetary Funds latest World Economic Outlook predicts Australian economic growth remaining below 3 per cent until at least 2016, a level deemed necessary to cut unemployment. The IMF says that while economic growth among major economies is improving, it is still far short of a full recovery. It made a minor cut to world growth over the next two years. Worley is ready for more cuts Outlook for jobs is not flash ASX soars on back of positivity MELBOURNE: WorleyParsons is expected to axe more jobs on top of the 500 the company cut last year in a costslashing restructure. The costs of the restructure will eat into this years profit result by $35 million. The companys culture also had to improve as there had been a decline away from customer care and shareholder outcomes, chief executive Andrew Wood said. The global and engineering group has been under market pressure since last Novembers abrupt profit warning, when 2014 guidance was cut from a forecast increase of more than $322 million to between $260 million and $300 million. The market liked yesterdays news, sending the stock up $1.07 to $16.55. CANBERRA: Weak employment growth is likely to continue as the Federal Governments jobs indicator has fallen for six straight months. The index anticipates movements in the growth cycle of employment, with a turning point confirmed after six consecutive monthly moves in the same direction. It fell 0.064 index points in April to minus 0.555 points. This signalled employment was likely to grow more slowly than its long-term trend rate of 1.1 per cent per annum over coming months, the Department of Employment said. The index is formed after considering four weighted components including newspaper job advertisements and various economic indicators. MELBOURNE: The Australian share market has closed at its highest level since the global financial crisis in mid-2008, boosted by a range of positive drivers. Rising consumer confidence amid positive global economic growth forecasts, acceleration in home lending in February and improving industrial metals prices boosted the ASX. CMC Markets chief market strategist Michael McCarthy said strong trading volumes and a near record low volatility index indicated there was a substance to the run of gains that might continue. What a great day for Australian investors, he said. The benchmark S&P/ ASX200 index closed up 53.2 points, or 0.98 per cent, at 5463.8 points.