Office products supplier Corporate Express says it’s on track to earn a sharply lower profit for the year to January 31, 2010 after reporting a 9.2% fall in earnings for the first 9 months of the year.
The company told the ASX yesterday that it is on track to deliver within analysts’ forecasts for the full year.
"We note that analyst Net Profit After Tax (NPAT) forecasts for the full year are now in the range $52.1 million to $56.1 million and we remain on track to deliver well within that range,” the company said.
That would be lower than the $63 million earned in the 12 months to January 2009, and would be the lowest net profit earned for six years.
Investors didn’t much like the news and sold the shares down 1.9%, or 9 cents, to $4.20.
The overall market was up 0.4%.
Corporate Express said net profit for its first three quarters to October 31 was $36.1 million, down from $39.8 million in the prior corresponding period.
Net profit in the third quarter was down 10% on the prior corresponding period at $10.7 million from $11.9 million.
Corporate Express managing director Paul Hitchcock said in the statement that "tough conditions" outlined at the company’s interim results had continued, "with business confidence in our markets remaining subdued".
"We anticipate most of our markets will remain subdued for the near term," Mr Hitchcock said.
"We are confident, however, that the underlying business remains strong.
"With a number of initiatives now completed, Corporate Express is well placed to benefit as confidence returns to the market and the $A returns to more stable trading patterns."
Total revenue for the nine months to 31 October 2009 was down 7.9% to $902.1 million and for the quarter total revenue was $302.9 million, down 11.3%.
Lend Lease Group has raised its offer for the 57% of Lend Lease Primelife Group (LLP) that it doesn’t already own by 13% as a final attempt to get the bid accepted.
The offer, which Lend Lease has told its Primelife Group is final, has been recommended by the target’s board’s independent directors.
The revised offer of 35 cents a security is up from the 31 cent offer in the original bid, Lend Lease Primelife said yesterday.
"The independent directors of LLP unanimously recommend that LLP securityholders vote in favour of the resolutions to approve the Revised Proposal, in the absence of a superior proposal," Lend Lease Primelife said in a statement.
To allow time for securityholders to consider the revised bid, Lend Lease Primelife said it would apply to the NSW Supreme Court to delay scheme meetings called to determine the proposal from December 8 until December 14.
Meanwhile the higher offer wasn’t the reason for the 9% jump (or 82 cents) in the share price of Lend Lease yesterday.
The shares closed at a strong $9.90 after the company told the market in another statement about the go-ahead for a huge property development in London.
"Lend Lease today announced that its subsidiary, Lend Lease Europe Limited, has agreed Heads of Terms with the London Borough of Southwark ("the Council") for the £1.5 billion (circa A$2.7 billion) regeneration of Elephant & Castle.
"The Council and Lend Lease have agreed that the current exclusivity arrangement will remain in place to enable both parties to work together to formalise a Regeneration Agreement in 2010.
"The project is one of the most significant schemes of its type in Europe, comprising over 300,000 square metres of new build, mixed-use development, together with major infrastructure improvements and a range of enhanced community facilities. The location, within two miles of London’s West End, is unrivalled for a development of this scale.
"The scheme comprises six phases. The first phase demolition is scheduled to commence in February 2010. Detailed planning consent for the first phase is expected to be achieved by April 2011. Both parties have expressed their commitment to work together on the redevelopment of all six phases of the site."
Just why this was seen as bullish given the state of the UK economy and property markets, is a bit odd.
Perhaps it was the fact that it is a big dollar project and a rare positive to emerge from the UK for Lend Lease which has been a bit of an unhappy hunting ground in the past year with big write-downs on other deals and the difficult Olympic Games Athletes Village project in London.
But the news caused Lend Lease shares to gallop ahead.
