Briefs

PAINTS

By InvestSMART · 1 Dec 2011

By InvestSMART ·
1 Dec 2011

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PAINTS

Colourful start

American paint giant Valspar, which last year bought leading Australian paint brand Wattyl for $142 million, has reported strong sales for its paint range at Woolworths new hardware outlet Masters but has warned that a soft local housing market had dented volume expectations. Addressing analysts, the Valspar president and chief executive, Gary Hendrickson, said he was pleased with the progress of Masters with five stores now opened and the paint group being awarded with a majority of the shelf space. Rival Bunnings has retaliated by not stocking Wattyl.

COAL

Demand slipping

Falling demand is feeding through to falling coal prices, Gloucester Coal told shareholders at yesterday's annual general meeting, although it remains confident in demand over the "medium to longer term". Prices of both coking coal, used in steelmaking, and steaming coal, used by power stations, are down about 10 per cent in the past six weeks or so, with no immediate prospect of a turnaround. According to coal industry specialist IHS McCloskey, export prices for good-quality Australian coking coal has fallen to $US240 a tonne from $US267 a tonne in October.

RETAIL

Sussan quits NZ

Fashion chain Sussan is to close six of its New Zealand stores and turn the remaining nine into outlets for its low-budget sister, Suzanne Grae. "We will exit the New Zealand brand in August next year," the Sussan chief executive, Colleen Callander, told BusinessDay. She said the move would increase the number of Suzanne Grae stores in New Zealand from 11 to 20.

TAKEOVERS

New Hope suitors

New Hope Coal says it has received several third-party takeover proposals and talks are continuing. The thermal coal miner invited formal takeover bids in early October, after receiving several unsolicited preliminary offers. "New Hope remains in discussion with several of those third parties, and those discussions remain confidential and incomplete," the company said in an ASX statement. It says the formal process had progressed to the second stage and was expected to take several months.

TAXATION

Carbon crusader

AUSTRALIA'S richest person Gina Rinehart, pictured, is happy for government to increases taxes on cigarettes and grog. But don't go increasing taxes on productive capacity through carbon and mining taxes. Writing in the Australian Resources and Investment magazine today, Mrs Rinehart said the taxes would only make Australia less competitive as a "recession approaches." She said Australia could learn from countries like Singapore and Monaco.

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Frequently Asked Questions about this Article…

What did Valspar report about Wattyl paint sales at Woolworths' Masters stores?

The article says Valspar reported strong sales of its Wattyl paint range at Woolworths’ new Masters hardware outlets. Valspar’s chief executive Gary Hendrickson said five Masters stores are open and the paint group was awarded the majority of shelf space, although a soft local housing market has dented volume expectations.

How has the retail rivalry with Bunnings affected Wattyl distribution?

According to the article, rival hardware chain Bunnings has retaliated against Valspar’s presence at Masters by choosing not to stock the Wattyl brand, which affects Wattyl’s distribution across major Australian hardware retailers.

What recent trend in coal prices did Gloucester Coal describe and what are the figures?

Gloucester Coal told shareholders that falling demand has led to lower coal prices. The article notes both coking coal (used in steelmaking) and steaming coal (used by power stations) are down about 10% in the past six weeks. Industry specialist IHS McCloskey put export prices for good-quality Australian coking coal at US$240 a tonne, down from US$267 a tonne in October.

What is Gloucester Coal’s outlook on coal demand over the medium to longer term?

While Gloucester Coal reported slipping demand and near-term price pressure, the company said it remains confident in coal demand over the 'medium to longer term,' despite no immediate prospect of a price turnaround.

What changes is fashion retailer Sussan making in New Zealand?

Sussan plans to close six New Zealand Sussan stores and convert the remaining nine into outlets for its lower-priced sister brand Suzanne Grae. Chief executive Colleen Callander said Sussan will exit the New Zealand brand in August next year, increasing Suzanne Grae stores in New Zealand from 11 to 20.

What is the status of takeover interest in New Hope Coal?

New Hope Coal has received several third-party takeover proposals. After unsolicited preliminary offers, it invited formal takeover bids in early October. The company said discussions with interested parties are ongoing, confidential and incomplete, the formal process has moved to a second stage, and it is expected to take several months.

What did Gina Rinehart say about taxation of mining and carbon in her commentary?

Gina Rinehart expressed that she supports higher taxes on cigarettes and alcohol but opposes increases in taxes on productive capacity—specifically carbon and mining taxes—arguing such taxes would reduce Australia’s competitiveness as a recession approaches. Her comments were published in Australian Resources and Investment magazine.

How might these company updates and market moves be relevant for everyday investors?

The article highlights several investor-relevant developments: Valspar’s strong retail placement at Masters (but housing softness may limit volumes), competitive retail dynamics with Bunnings not stocking Wattyl, falling coal prices that affect coal producers’ revenues, takeover interest in New Hope Coal that could drive corporate activity, and retail restructuring by Sussan in New Zealand. These points can signal changing revenue drivers, competitive risks and corporate events to monitor for companies mentioned.