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Campbell Brothers Limited (CPB) expects to post an underlying net profit after tax for the half year ending 30 September 2010 of between $63 million and $68 million. The company reported a net profit after tax of $38 million for the previous corresponding period and a record result of $57 million in the half year to September 2008.

The chemicals manufacturer said the forecast result reflects current strong trading conditions for the majority of its operations, as well as a solid contribution from Ecowise and PearlStreet, which were acquired in the second half of last year.

Campbell Brother said sample flows into ALS’s global mineral laboratories have increased by more than 50% during the first 12 weeks of the financial year and the company expects current activity levels would be maintained through until at least December of this year, before thinning during the traditional off-season.

The company expects the pricing pressure seen over the past year to be maintained as both ALS and its competitors increase capacity as the industry ramps up.

Campbell Brothers said it remains cautiously optimistic about the March 2011 second half, but added that it is mindful that the northern hemisphere winter would result in a substantial slowdown in environmental sampling in that region. The company expects to see a traditional “off-season” in mineral exploration activity from January to March 2011.

As at 1452 AEST, Campbell Brothers' shares were up 90c to $30.20.

Local shares pushed higher Tuesday morning, buoyed by the major miners and the banks. Investors were encouraged by speculation the new Prime Minister will seek to end the impasse with the mining industry over the RSPT quickly, while stronger metal prices also strengthened the sector.

With only day to go before the new financial year, the ASX/200 was 0.4% stronger by lunch.

At midday, the All Ords added 12.1 to 4,421.8, while the ASX/200 put on 14.6 to 4,399.1. Around 1.1 billion shares worth around $4.9 billion had changed hands.

BHP Billiton and Rio Tinto gained 0.8% and 1.7% respectively. RBS this morning speculated that Rio shareholders might vote against the proposed merger of iron ore operations with BHP in the Pilbara region.

Newcrest and Lihir were down 1.9% and 1.8% respectively to $35.24 and $4.33 respectively.

Steel stocks, Bluescope and Onesteel edged around 1% higher, while Nufarm was upgraded to Neutral by Credit Suisse, sending that company’s shares 27c higher to $5.47.

The broader Materials and Resources sector gained 0.3%.

The Banks and Financials sector rose 0.6%. Of the major banks, Westpac put on 26c to $21.77, while NAB added 19c to $23.72.

Investment bank Macquarie eased 0.1% lower, extending its worst five-day loss in over 15 months. The banks have been hit by deteriorating business conditions and the loss of key staff.

AMP and QBE were 0.7% and 0.3% lower, countering modest gains from the other insurers.

The Property Trusts were subdued, easing to a 0.4% gain for the morning. Goodman Group was the only significant mover, up 2c to 64c.

A 21c decline in the price of Woodside shares couldn’t stop a 0.2% overall rise from the Energy sector. Santos countered with a 15c rally to $12.81.

Linc Energy was 4.1% stronger after saying it is experiencing success in the development of a hydrogen fuel cell.

Downer EDI tumbled 20c, or 5% to $3.79 after responding to media reports, saying the company had ample liquidity with in excess of $600 million in available funds.

The Industrials sector eased 0.4% lower, despite Brambles and Leighton - the sectors two biggest companies - edging higher.

Elsewhere Asciano, Toll and Transurban were between 1% and 1.5% lower.

The Consumer Staples and Discretionary sectors were 0.3% and 0.2% stronger.

Newscorp helped media stocks higher with a 1.8% gain to $17.14, while Tatts Group eased just 1c lower to $2.24, despite writing off $165 million, mainly from its UK businesses.

Wesfarmers rallied 36c to $29.55, countered by a 17c fall in the price of Woolworths shares to $27.30 

Around the region, the Nikkei 225 gained 47.7 to 9,741.6, the Straits times Index added 9.9 to 2,879.9 and the NZSE50 retreated 13.1 to 2,995.3. 

Spot gold was trading at US$1,236.90 per ounce, while the Aussie was buying US$0.8717.  

Arrow Energy Limited (AOE) said its 90% owned subsidiary, Arrow Energy International Pte Ltd (“AEI”) and its partners, have been awarded two blocks in the Coal Bed Methane (“CBM”) IV bidding round in India by the Cabinet Committee on Economic Affairs (CCEA). The company said it believes the two blocks, Assam and Satpura, have high CBM resource potential with good opportunity for early commercialisation in the event of successful exploration and pilot testing. AEI (60% working interest) and Oil India (40%) have proposed a exploration and development program on the Assam Block located in north east India, consisting of drilling 15 core holes and two production wells in two years under Phase-I, and 30 production wells in the following two years under the Phase-II pilot drilling program. AEI (80% working interest) and Tata Power (20%) plan to drill 15 core holes and two pilot wells in two years at the Satpura Block under the proposed Phase-I exploration program and 21 pilot wells during the Phase-II program.

OceanaGold Corporation (OGC) has approved an additional exploration program at the Reefton goldfield and surrounding areas. The company said the exploration budget for the New Zealand project has increased by US$4.4 million for FY11 from the previous FY10 budget for exploration of US$2.8 million. OceanaGold said the increased exploration activities would focus on new drill programs targeting potential underground mining targets, a review of the Sam’s Creek project to examine the best strategic option to progress the deposit and an increase to technical staff for the exploration department.

Downer EDI Limited (DOW) said it has ample liquidity with in excess of $600 million in available facilities and cash balances. The engineering and infrastructure services company made the statement after an article in the Sydney Morning Herald and The Age today said one of Downer’s key divisions halted supplier payments of more than $35 million to meet end-of-year cash-flow targets and avoid a potential net cash outflow.

The Fairfax article said a leaked internal email from a senior executive at Downer had called into question the group's financial reporting.

In response, Downer said the  Works Australia division expects to pay all creditors as per agreed creditor terms whilst meeting its internal cash targets.

“The $35 million referred to in the articles relates to identified collectable debtors not creditors as inferred and a significant portion of this amount is expected to be received by year end,” the company said.

Downer said it would continue to manage its debtors and creditors to ensure a strong and balanced focus on total management of working capital.

As at 1103 AEST, Downer EDI shares were down 19c to $3.80.

Nanosonics Limited (NAN) this morning said it has re-commenced production and shipment of its upgraded Trophon EPR devices, used for disinfecting ultrasound devices, following successful trials of the product. The company also said that its application for approval by the FDA was “firmly on track”.

Currently Nanosonics said it was finalising specifications and validation of a chemical indicator to meet US regulatory standards.

”Pending completion of this work and FDA approval, the Company remains on track for an initial product launch into the US market during 2011,” the company said.

Meanwhile in Australia, Nanosonics was upping production at its Alexandria, NSW premises and it currently held orders for over three months of production capacity.

At 1057 AEST, Nanosonics shares were trading up 1.5c to 54c.

Macmahon Holdings Limited (MAH) said it would have insufficient franking credits available to frank a final dividend as a result of lower than anticipated tax payments. The company did, however, confirm that its target dividend payout policy of 50% remains in place.

In a statement released today, Macmahon reaffirmed FY10 net profit after tax guidance of $36 – $40 million.

The company said it has won $1.2 billion of work since 1 January 2010 and has an order book in excess of $2.1 billion.

As at 1036 AEST, Macmahon shares were up 2c to 58.5c.

Tatts Group Limited (TTS) said it was writing off $140 million off the value of its Talarius investment in the UK, as well as taking another $25 million hit on the value of the software used by its Maxgaming business. Despite this the gamer said it would be paying a dividend not less than the final dividend paid in October last year.

Despite what Tatts said were improving conditions for Talarius through 2010, it was still struggling to overcome the GFC as well as other adverse decisions including a smoking ban.

Meanwhile, the latest UK government budget, which includes a hike in the country’s VAT to 20%, was expected to further impact the business.

Tatts said the new carrying value of Talaris was around $180 million.

At 1023 AEST, Tatts Group shares were trading down 2c to $2.23.

RBS – Round Up – 290610

Wall Street ended a choppy session just below the gain line Monday as investors remain cautious ahead of the release of several significant economic reports later in the week. Consumer stocks bounced off Friday’s falls, while banks weighed.

In economic news, personal income increased slightly below what was expected at 0.4% in May according to the Commerce Department. Personal spending rose 0.2%, higher than the 0.1% increase forecast.

The Dow Jones shed 5.29 points, or 0.05%, to 10,138.52, the S&P's 500 dipped 2.19 points, or 0.20%, to 1,074.57 and the NASDAQ lost 2.83 points, or 0.13%, to 2,220.65.

Financials closed lower in the wake of the reform bill that was finalised by Congress last week. It is expected to be voted on this week and sent to President Obama in July.

JPMorgan and Goldman Sachs fell 2.3% and 2.2%, while Bank of America retreated 1.2%.

Citigroup bucked the trend, adding 1.5%.

It was a mixed day for the tech heavyweights. Microsoft and Oracle slid 0.9% each, while IBM and Apple countered by gaining 1.5% and 1.1%.

Consumer stocks were boosted by the better than expected consumer spending report. Coca-Cola and Wal-Mart rose 1.6% each.

Tobacco companies gained ground after the Supreme Court declined to listen to an appeal over the government's capacity to collect US$280 billion from the industry for alleged fraud in its marketing.

Altria and Reynolds put on 3.3% and 4.1%.

Exxon Mobil and ConocoPhillips shed 1.1% and 1.4% as NYMEX light crude oil for August delivery fell US90c to US$77.96 a barrel.

BP ADR’s edged 0.1% higher after the besieged oil giant revealed it has spent US$2.65 billion on costs related to the Deep Water Horizon oil spill in the Gulf of Mexico.

COMEX gold's August contract dropped US$16.60 to US$1,239.20 per ounce.

European Markets

European stocks moved higher for the first time in five sessions as the G20 nations vowed to preserve economic growth while reducing debt at a meeting in Toronto. Positive consumer spending data out of the US also buoyed the market.

The UK benchmark FTSE 100 added 25.21, or 0.50% to 5,071.68. The French CAC40 advanced 56.72, or 1.61% to 3,576.45, while the German DAX gained 86.62, or 1.43% to 6,157.22.

UK banks Lloyds and Barclays gained 2.2% and 1.5%, while Royal Bank of Scotland shed 2.2%.

On the continent BNP Paribas and Deutsche Bank rose 3.6% and 0.9%.

Peugeot Citroen rallied 2.8% on reports the automaker has increased its sales target for the DS3 model.

Porsche put on 3.1% on the back of a broker upgrade.

Aussie miners Rio Tinto and BHP Billiton advanced 2.1% and 0.8% following a rise in metals prices.

Anglo American gained 2.2%, while company BP bounced off a 14-year low by adding 1.4%.

Premier Oil climbed 7.1% after the company said one of its North Sea well encountered oil-bearing sandstones.

Japanese Markets

Japan’s Nikkei retreated to its lowest close in more than a fortnight on a very thin day’s trade. Concerns the benchmark could test six-month lows that were recently hit heightened.

The Nikkei 225 lost 43.54, or 0.45% to 9,693.94.

Toyota dropped 1.1% to a 15-month closing low on reports it was recalling and halting sales of its 2010 Lexus HS250h hybrid sedan temporarily due to a potential mechanical issue.

Mazda dipped 1.4%, while consumer electronics companies Canon and Panasonic fell 1.1% and 1%.

Mizuho Financial shed 2.6% to a seven-month low after revealing it is set to raise a higher-than-anticipated US$9.6 billion in a global offering.

Mitsubishi UFJ and Sumitomo Mitsui lost 1.9% each.

Shinsei Bank slumped 4.9% after a target price downgrade from Credit Suisse.

Nippon Yusen K.K. and Mitsui O.S.K. Lines slid 2.1% and 3.2% after a decline in the Baltic Dry Index.  

Hong Kong Markets

The Hang Seng edged higher, snapping two days of declines. Property stocks buoyed the market, while oil plays edged higher.

The Hang Seng edged 35.89, or 0.17% to 20,726.68.

Heavyweight lender ICBC put on 0.3%, while HSBC, which makes up one-sixth of the Hang Seng index, eased 0.3% below the line.

Sino Land added 2.2%, while Sun Hung Kai Properties added 1.1%.

Clothing maker, Li & Fung lost 1%, while mobile phone maker Foxconn International gave up 1.1%.

New World Development put on 1.9%.

Off-shore oil producer Cnooc added 2.4%, while Petrochina edged 0.2% above the line. 

Australian shares got off to a disappointing start to the week as the broader indices closed 0.7% in the red. While it was relatively mixed among the mid and smaller capped stocks, consistent falls from the blue chips weighed.

At the bell, the All Ords lost 29.7 to 4,409.7, while the ASX/200 fell 28.5 to 4,384.5. Around 1.6 billion shares worth around $3.9 billion had changed hands.

BHP Billiton and Rio Tinto retreated 31c and $1.00 to $38.49 and $68.60 respectively.

Steel stocks were also sold. Bluescope, Onesteel and metal recycler Sims Group retreated 1.8%, 1.6% and 2.7% respectively.

Fortescue Metals Group reversed early losses to close 6c, or 1.4% higher at $4.42.

Many smaller gold plays once again countered the broader decline among Materials and Resources stocks.

St Barbara rose 2.8%, while newcomer, Eldorado Gold tacked on 2.3%.

However, Newcrest and Lihir, the two biggest gold miners, lost 8c and 3c to $35.92 and $4.41 respectively.

The sector retreated 0.8%.

Oil Search added 2c to $5.72, however the broader Energy sector gave up 0.4% as several majors lost ground.

Santos and Origin weakened 0.3% and 0.7% respectively.

Coal miner Whitehaven tumbled 18c to $4.84, while WorleyParsons jumped 35c to $22.15 after signing a deal with Brazilian mining giant Vale for engineering work on an iron project in that country.

The Banks and Financials sector lost 0.7%.

Among the big four banks, CBA edged 5c lower to $49.95, while NAB and Westpac were both down 1.1% to $23.53 and $21.51.

ANZ shed 0.8%, while investment banks Macquarie retreated 55c, or 1.4% to $38.95.

Meanwhile, insurer QBE gained 12c to $18.47.

The Property Trusts sector was 0.7% lower, with Westfield virtually flat, and GPT and Goodman Group 1.7% and 3.1% below the gain line.

The Consumer Staples sector was flat. Wesfarmers added 9c, or 0.3% to $29.19.

Coca-Cola and Foster’s retreated 11c and 5c to $11.92 and $5.64 respectively.

Beleaguered rural services company, Elders was 4.1% higher at 38c. The company hit an all-time high of $28.30 on this day three years ago.

The Consumer Discretionary sector retreated 0.7%.

The retailers were weaker. Billabong, Pacific Brands and Harvey Norman dropped 1.1%, 2.7% and 1.7% respectively.

Media stock Newscorp fell 32c, or 1.9% to $16.83.

The Industrials sector was down 1.2%. Brambles continues to suffer after losing a key US customer several weeks ago. Its shares lost 21c to $5.56.

Leighton shed 66c to $30.00, while Auckland International Airport slumped 3.8% to $1.53.

Telstra shed 1c to $3.29 as the Telecommunications sector weakened 0.5%.

Around the region, the Nikkei 225 fell 43.5 to 9,693.9, the Straits times Index gained 10.9 to 2,862.5 and the NZSE50 retreated 25.7 to 3,008.4. The Hang Seng advanced 72.4 to 20,763.2.

Spot gold was trading at US$1,255.47 per ounce, while the Aussie was buying US$0.8735. 

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Asciano restructures bank facilities, plans to simplify corporate structure
Asciano Group said it has completed the restructuring of its bank facilities. The ports and rail operator said the restructure provides for the release of security held by the bank syndicate and removes prohibitions on borrowing outside the existing facilities.

At the close, Asciano shares were up 1.5c to $1.69.

WorleyParsons secures Vale contract
Engineering firm WorleyParsons said that Brazilian mining giant Vale had awarded a “significant cost reimbursable” contract to a consortium of WorleyParsons and SNC-Lavalin for engineering and project management work at Vales’s multi-billion dollar S11D project in Brazil. WorleyParsons, in a statement to the Australian Stock Exchange, declined to put a figure on the expected value of the contract.

At the bell, WorleyParsons shares were up 35c to $22.15.

Wattyl accepts Valspar offer
Wattyl has recommended shareholders accept The Valspar Corporation’s takeover bid, which values the Australian paint maker at approximately $142m. The US paint and coatings company offered shareholders $1.67 per share.

At the end of the day, Wattyl shares were trading up 35.5c to $1.615.