IN BRIEF

CONSTRUCTION Leighton Holdings shares dropped 3.6 per cent yesterday after the construction group announced it had pushed back the completion date for Brisbane's Airport Link toll road by almost two months. It said the airport link should be open to traffic on or before August 20, instead of the previous forecast of June 30. Leighton, which owns the Thiess and John Holland companies involved in building the project, said it had made adequate commercial allowances for schedule changes and the ...

By InvestSMART · 8 May 2012

By InvestSMART ·
8 May 2012

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MINING Arafura Resources has struck a deal with a mystery South Korean conglomerate to potentially co-develop its Australian rare earths project. Arafura did not name the multinational organisation in an announcement to the ASX yesterday, but said it had signed a memorandum of understanding with it. The memorandum included a sale and purchase agreement over Arafura's Nolans Project rare earths products, funding arrangements to get the project into production, and plans to co-develop rare earths separation facilities in Australia and Korea.

MEDIA New figures show the advertising market for radio continues to struggle, with total revenue for metropolitan commercial stations falling 0.6 per cent for the 10 months to April, to $560 million. Commercial Radio Australia described the figures as patchy: Melbourne grew just 0.14 per cent to $169 million while the Sydney market suffered the biggest falls down 3.14 per cent to $171 million. The Adelaide radio market topped the list, growing 3.88 per cent to $53.5 million.

RETIREMENT FKP will be a big player in the New Zealand retirement village and aged-care business after the NZ-based Metlifecare signed merger agreements to acquire Vision Senior Living and Private Life Care Holdings. Metlifecare is 50 per cent owned by Retirement Villages Group, which is managed by FKP, and FKP also has a 21 per cent stake in RVG. FKP managing director Peter Brown said the deal was a good reference point for the company's review of its retirement portfolio, which is expected to be completed in the next month.

PROPERTY GPT chief executive Michael Cameron was given a grilling by shareholders at the annual meeting yesterday for his acceptance of a board seat at Suncorp. Investors said they felt he had enough work running the property trust. However, GPT chairman Rob Ferguson dismissed the concerns, saying Mr Cameron's board seat would help him "broaden his exposure to the business world". He added that GPT's core business was now well positioned, with structured rental increases and high levels of occupancy. "This will underpin earnings growth," he said.

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Frequently Asked Questions about this Article…

Why did Leighton Holdings shares fall after the Airport Link delay and what did the company say about earnings?

Leighton Holdings shares dropped after the company pushed back the completion date for Brisbane’s Airport Link toll road from June 30 to on or before August 20. Leighton — which owns Thiess and John Holland, the firms building the project — said it had made adequate commercial allowances for the schedule change and that the delay would not affect its profit guidance for 2012.

What should investors know about Arafura Resources’ deal with a South Korean conglomerate for the Nolans Project?

Arafura Resources signed a memorandum of understanding with an unnamed South Korean conglomerate to potentially co-develop its Nolans Project rare earths assets. The MOU covers a sale and purchase agreement for Nolans products, funding arrangements to move the project into production, and plans to co-develop rare earths separation facilities in Australia and Korea.

How is the Australian metropolitan radio advertising market performing and which cities stood out?

Radio advertising revenue for metropolitan commercial stations fell 0.6% for the 10 months to April, totaling $560 million. Results were patchy: Melbourne grew slightly (about 0.14% to $169 million), Sydney saw the biggest fall (down about 3.14% to $171 million), while Adelaide recorded stronger growth (about 3.88% to $53.5 million).

What does the Metlifecare merger mean for FKP’s position in New Zealand retirement and aged-care?

Metlifecare signed merger agreements to acquire Vision Senior Living and Private Life Care Holdings in New Zealand. Metlifecare is 50% owned by Retirement Villages Group (managed by FKP), and FKP also holds a 21% stake in RVG. As a result, FKP is expected to be a significant player in New Zealand’s retirement village and aged-care sector, and the deal will inform FKP’s upcoming review of its retirement portfolio.

What concerns did GPT shareholders raise about CEO Michael Cameron’s external board role, and how did the company respond?

Shareholders questioned GPT CEO Michael Cameron’s decision to accept a board seat at Suncorp, saying it might stretch his time running the property trust. GPT chairman Rob Ferguson dismissed those concerns, saying the Suncorp board seat would broaden Cameron’s business exposure. Ferguson also said GPT’s core business is well positioned, with structured rental increases and high occupancy supporting earnings growth.

Does the Airport Link delay change Leighton Holdings’ profit outlook for 2012?

According to Leighton Holdings, the Airport Link delay should not affect the company’s profit guidance for 2012 because it had made adequate commercial allowances to cover the schedule change.

What are the key elements of the Arafura Resources memorandum of understanding that investors should watch?

Investors should watch three main elements in the Arafura MOU: the proposed sale and purchase agreement for Nolans Project rare earths products, the funding arrangements intended to bring the project into production, and plans to jointly develop rare earths separation facilities in both Australia and Korea.

How might GPT’s claims of structured rental increases and high occupancy affect investor expectations?

GPT’s management says structured rental increases and high occupancy levels will underpin earnings growth. For investors, this suggests management expects stable rental income and occupancy to support future earnings, but shareholders remain attentive to governance and executive time commitments when managers take on external roles.