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Sigma Pharmaceuticals Limited (SIP) reported a post-tax loss for the group of $389 million for the year ended January 31, 2010, from a profit $80.1 million in the previous corresponding period. The result, coupled with other financial pressures on the company, sent the Sigma's share price into a tailspin, down 40c to 50c as it resumed trading this afternoon for the first time in more than a month.

The loss includes a writedown in goodwill of $424.2 million – mostly from Arrow Pharmaceuticals – considerably more than market expectations, with observers expecting a loss closer to $150 million.

Despite the loss, the company said the underlying financials of the company were sound, and that Sigma was expecting post-tax profit in FY11 to return to FY09 levels of around $80 million.

Sigma said the reduction in carrying value of goodwill was due to the increase in market pressure from the rise of generic brands and the subsequent squeeze on cash flow.

The company has been suspended from quotation for the last five weeks as it sorts out debt covenants with its banks, a situation which has prevented it from reporting until now.

As the financial pressure is increased on the company, analysts now expect Sigma to off-load the disappointing Herron brand for between $50 million and $100 million.

Looking at the results in more detail, Sigma said its underlying business remains sound and profitable, with sales revenue up 4.5% to $3.22 billion.

”Underlying FY2010 net profit was $67.7 million, a 15.5 per cent decrease on the prior year due principally to increasing market pressures in generics and a lack of uptake in year end promotions,” the company reported.

The board said that no final dividend would be paid.

As at 1423 AEDT, Sigma shares were down 32.5c, or 36.1% to 57.5c.

Macarthur Coal Limited (MCC) confirmed Peabody Energy Corporation has offered to acquire all the shares in Macarthur for cash consideration of $13.00 per share. However, the company said its board believes the offer is not in the best interests of shareholders.

In its current form the indicative, non-binding and conditional proposal included, among other items, appropriate support being received from Macarthur's three major shareholders who collectively hold approximately 47.4% of the Macarthur register and Macarthur’s takeover bid for Gloucester Coal Limited (GCL) not proceeding.

Macarthur said it intends to proceed with the shareholder meeting scheduled for 12 April 2010 to consider the proposed issue of Macarthur Coal shares to Noble Group Limited under the takeover of 100% of Gloucester Coal and the acquisition of Noble’s interest in the Middlemount Coal joint venture.

The company said Peabody’s proposal does not represent an adequate premium to Macarthur’s recent trading prices and its average broker price target.

Macarthur’s shares were halted at $12.09 each prior to the commencement of trade today.

The company added that the outlook for coal markets has improved significantly over the past quarter, citing AME Mineral Economics recent increase to forecasts for JFY10 and JFY11 LV PCI prices.

Macarthur said it has been advised by Peabody that it has initiated discussions with Macarthur’s three major shareholders, CITIC Resources Holdings Limited, ArcelorMittal SA and POSCO, in relation to an aspect of the proposal that may provide them with an ability to retain their respective interests in a privatised Macarthur, in an unlisted entity controlled by Peabody.

However, Macarthur said it has been advised that no agreements have been entered into with those shareholders.

Peabody has indicated that disclosure of the proposal without its consent could diminish its interest in pursuing a transaction.

Chairman of Macarthur, Keith DeLacy, said the proposal is highly conditional and does not fully value Macarthur and its significant growth prospects.

“Furthermore, Macarthur believes there are numerous strategic and operational benefits in the proposed acquisitions of 100% of Gloucester and Noble’s interest in the Middlemount JV, to which it remains committed,” Mr DeLacy said.

Ten Network Holdings Limited (TEN) has reported a $58.6 million profit for the six months to 28 February, a swing from an $80 million loss in the previous economic period. However, more significantly, the network said its underlying post-tax profit rose a more modest 3%, to $58.7 million, from $56.8 million.

Executive chairman, Nick Falloon, said the result was slanted more towards the second quarter, reflecting an improving outlook for the market.

"These first half results reflect the continual improvement in external operating conditions, notably a considerably stronger second quarter when television revenue grew by more than 12 per cent compared to the same period last year,” Mr Falloon said.

”In an improving market, with strong advertiser renewals and a proven schedule, Network Ten is striving to deliver another successful year in 2010.”

Mr Falloon said revenue would be lifted by strong demand in the second six months of FY10, while noting that the impact of the government’s decision to offer up to $250 million in tax relief across the networks had not been included, adding that would be applied retrospectively from January 1.

Looking at the results, group revenue was $474 million, up from $467 million in the previous corresponding period.

However, EDITDA fell to $117.5 million, from $118.9 million.

Despite the return to profit, the board has declined to offer a dividend for the six months saying the company would reconsider its dividend policy when a new board starts in July this year.

At 1324 AEDT, Ten shares were 3.5c higher at $1.89.

Aussie shares followed the lead from Wall Street Wednesday, with the ASX/200 trading close to flat through to lunch. The major stocks, including the banks and heavyweight miners failed to get any traction in either direction, while gains from the mid-cap coal miners were countered by weakness in the banks.

In economic news, total credit provided to the private sector by financial intermediaries rose by 0.4% over February 2010, following an increase of 0.4% over January. Over the year to February, total credit rose by 1.6%.

Elsewhere, according to the Australian Bureau of Statistics retail sales unexpectedly fell 1.4% in February following a 1.1% increase in January. Forecasts were for a 0.3% rise in sales for the month, with the drop attributed to four official interest rate hikes since October.

At noon, the All Ords lost 6.2 to 4,920.6, while the ASX/200 shed 10.5 to 4,906.3. Around 1 billion shares worth around $2.1 billion had changed hands.

The major market movers today were the coal stocks as a result of Macarthur Coal entering a trading halt ahead of a proposed takeover offer, rumoured to be from US coal giant, Peabody.

Whitehaven Coal rallied 30c, or 6.1% on the news, while Centennial Coal added 24c, or 5.8% to $4.39.

BHP Billiton lost 30c, or 0.7% to $44.11. Rio Tinto was just 6c lower at $79.19, while the Energy sector’s major player Woodside edged 25c, or 0.5% higher to $47.24.

Santos lost 0.9%, while Oil Search edged 5c, or 0.8% higher to $6.01.

Elsewhere Gindalbie Metals rose 5.5% to $1.245 following yesterday’s finalisation of an off-take agreement with an Asian steel producer.

James Hardie added 11c, or 1.5% on a broker upgrade.

The Materials and Resources sector lost 0.3%, while the Energy sector added 0.4%.

The Banks and Financials sector drifted 0.4% lower.

The big four banks were little changed. NAB and Westpac rose 6c and 1c to $27.76 and $28.13 respectively.

Bourse operator ASX fell 94c, or 2.7% to $34.08. The company is set to face competition as not the only market operator in the country.

Among the insurers, QBE lost 15c to $20.90. At the company’s AGM this morning QBE said it was in track to meet insurance profit margin of between 16% and 18%.

AMP lost 10c, or 1.6% to $6.28.

Property Trusts were mixed, however the sector was 0.1% higher despite a 6c, or a 0.5% fall from Westfield.

Goodman Group rallied 1.5% to 66c.

The unexpected slide in retail figures hurt the retailers.

David Jones and Myer lost 1.4% and 0.3% to $4.78 and $3.36 respectively, while JB Hi-Fi slumped 43c, or 2.1% to $20.27.

The media stocks were generally flat. Ten Network added 2c, or 1.1% to $1.875 ahead of an expected profit to be announced this afternoon, following a loss previously.

The Consumer Discretionary weakened 0.4%, while Consumer Staples were 0.3% higher on the back of gain of 21c, or 0.7% to $31.93.

Among Industrial stocks, Brambles and Leighton shed 5c and 25c to $7.35 and $39.03 respectively.

Boart Longyear was the standout as the mining services company added 4.6% to lunch, bringing two-day gains to more than 11%.

Airline stocks were lower, with Qantas, Virgin Blue and MAp Group losing between 1% and 2%.

The sector was 0.3% lower.

Telstra lost another 2c to $3.00, while Hutchison jumped 9.1% to 12c.

The Telecommunications sector fell 0.3%.

Around the region, the Nikkei 225 advanced 18.8 to 11,116.0, while the NZSE50 gained 11.8 to 3,261.5. The Strait Times Index retreated 12.0 to 2,921.4.

Spot gold was trading at US$1,106.00 per ounce, while the Aussie was buying US$0.9163. 

QBE Limited (QBE) said it was on track to meet its targeted full year insurance profit margin of between 16% and 18%. The insurer said that the outlook meant it was likely that they could maintain its dividend in 2010.

Speaking at today’s AGM, QBE chairman John Cloney said that the group expects lower interest income due to the impact of the historically low yields on its US and UK investment portfolios.

”However, we remain confident about our medium and long-term outlook, particularly from the expected rise in interest rates,” Mr Cloney added

”We also expect that 2010 will be a difficult year with top line revenue and reported profit in Australian dollars adversely affected by the stronger average Australian dollar when compared with 2009.”

Meanwhile CEO, John O’Halloran, said QBE’s gross earned premium income has grown by a compound 18% per annum in the past 10 years despite the strengthening of the Aussie dollar over that time.

”Our growth mainly came from acquisitions with 75 being converted in the last 10 years, including four in 2009,” Mr O’Halloran said.

Mr O’Halloran added that the buying spree from QBE was not ending, saying that QBE’s businesses and balance sheet were in ‘great’ shape and the insurer was currently negotiating a number of acquisitions and new distribution arrangements.

”We do face two major headwinds in 2010 over which we have little control, namely the rising Australian dollar and the very low interest yields, particularly in the US, UK and Europe,” Mr O’Halloran said, echoing his chairman’s comments.

”Our 2010 target is 3% growth in Australian dollars or 18% growth in US dollars. These targets are before conversion of large acquisition opportunities.”

At 1116 AEDT, QBE shares were trading down 18c to $20.87.

iSOFT Group Limited (ISF) announced a contract worth more than $2 million with ACT Health in Australia for new patient and emergency software applications at Calvary Public Hospital. The health information technology company said the agreement is for the installation of iSOFT Patient Management and iSOFT Emergency at the 280-bed Calvary Hospital this year. iSOFT said about $900,000 of the total consists of license fees