Two small earnings upgrades yesterday for June 30, 2010 companies.
They came from small industrials, retailer Noni B and accommodation group Wotif.
In fact the upgrades were rarities in that they went against the recent trend of companies warning that earnings and sales were under pressure (Toll, IAG, Woolies, Coles, etc).
Wotif.com is an online accommodation and travel booking site, and it said yesterday that it expects full-year profit to rise as much as 29% as hotel occupancy levels in Australia remain strong.
Shares in Wotif ended up 9c, or 1.8% at $4.99 yesterday after the statement.
The move by Wotif to issue the update followed the company’s shares falling to an 8 1/2 month low of $4.90 on Tuesday.
Wotif told investors that net profit for the 12 months to June 30 would be between $52 million and $56 million.
The update was in a presentation to an investment conference.
The company reported net profit of $43.5 million for the 2009 financial year and a record $27.6 million profit for the December 31 half year.
Wotif said in the slides that occupancy levels in Australia remained strong and the outlook for room rates was strengthening.
But the outlook for its business in Thailand remained challenging, with the recent unrest impacting visitor numbers.
And women’s Clothing retailer, Noni B Ltd, says it expects net profit between $3.4 million and $3.8 million in fiscal 2010, up from $2.3 million in the 2009 year.
Noni B’s joint managing director, David Kindl, said in a short statement to the ASX that the profit improvement reflected an increase in earnings before interest and tax (EBIT) margin through avoiding more aggressive discounting as well as tight control of costs.
"With our well recognised brand and loyal customer base, the company is well positioned to take advantage of any improvement in customer sentiment in the 40+ women’s fashion market," Mr Kindl said.
Noni B’s audited results for fiscal 2010 will be announced on 18 August.
Noni B went through tough times in 2007 and 2008, when it restructured and changed its retailing emphasis.
Given the amount of doubt about retailing stocks at the moment, the guidance update was among the better ones so far released.
The "aggressive discounting" thought tells us that conditions are tough as well for the likes of Noni B.
And tough they are. The retailer made a first half profit of $3.6 million, so it looks like the second half will be a small loss or profit.
That’s why the shares eased 2.5c to $1.15 yesterday.
