ASX 200 erases losses to end flat; energy stocks fall; Lendlease and Fletcher drop; PwC restructure

Fletcher drops 11 per cent on profit warning. Household spending growth slows: CBA. PwC restructures. Business conditions ease: NAB. Lendlease down as fights tax bill, sets investor day. ASIC probes ANZ bonds sale. 

The ASX will be lower on Monday open ahead of the federal budget. Picture: NCA NewsWire / Jeremy Piper

Welcome to the Trading Day blog for Friday, May 13. The ASX 200 erased its losses to close a fraction in the green, up just one point at 7750 points. ANZ, Macquarie traded ex-dividend. 

The Aussie dollar is trading near US65.95c.

Updates

4:56 pm May 13, 2024

GUD Holdings confirms guidance

Megan Neil

GUD Holdings says its underlying earnings are in line with expectations for the 2024 financial year, amid a resilient automotive aftermarket.

GUD says its group FY24 underlying earnings before interest, tax and amortisation (EBITA) is in line with expectations and is forecast to be at least $193.5m. GUD reported underlying EBITA of $191.1m in FY23.

The company says its automotive businesses, excluding the APG 4WD accessories and trailer operation, continues to trade well across its key business units, which it says reflects ongoing execution of its diversification strategy and the resilience of the aftermarket. "End user workshop demand remains positive."

GUD says APG is expected to deliver approximately $63m in underlying EBITA, about $3m below the company's expectation at the time of its first half result.

GUD pointed to a number of reasons for the APG result including that the recovery in the New Zealand business is taking longer than expected, the impact of lower Toyota volumes, and emerging consumer-related softness in the trailering market.

"APG is forecasting further revenue and EBITA growth in FY25 as headwinds partially
moderate and new business wins begin to contribute."

4:24 pm May 13, 2024

ASX 200 ends flat before key events

David Rogers

Australia's share market recovered from an intraday fall before key events.

The S&P/ASX 200 closed little changed at 7750 points after falling to 7721.5.

The index jumped 7 points in the closing match.

The Federal Budget is due Tuesday, Australia's wage price index and US CPI data are due Wednesday and Australian jobs data are out on Thursday.

Sectors were split between winners and losers with notable outperformance coming from consumer discretionary, consumer staples and health care stocks and underperformance evident in energy and tech.

In the financial sector, ex-dividend falls in ANZ and Macquarie were offset by a 1.3 per cent rise in CBA and a 0.7 per cent jump in NAB.

In the consumer sectors Wesfarmers rose 0.8 per cent and Woolworths gained 1 per cent. Iron ore miners were mixed with BHP up 0.8 per cent and Rio Tinto down 0.8 per cent. Woodside Energy fell 1.1 per cent as oil prices fell.

LendLease falls lost 2.9 per cent as it fights an ATO tax assessment.

Fletcher Building dived 11 per cent after another profit warning.

3:00 pm May 13, 2024

Orexplore goes into administration

Megan Neil

ASX-listed mineral analysis scanning technology group Orexplore Technologies has gone into voluntary administration, as it looks towards a recapitalisation and/or sale.

Orexplore says its directors resolved on Monday to appoint Quentin Olde and Liam
Healey of Ankura Consultingas joint and several voluntary administrators. While the administration also covers subsidiary Orexplore Australia, it does not cover offshore subsidiaries in Chile and Sweden.

The administrators have assumed control of Orexplore’s operations and are undertaking an assessment of its operations, the company says. "It is expected that Orexplore's operations will continue to trade on a business-as-usual basis so much as possible during the administration."

Orexplore says the administrations will shortly commence a dual track recapitalisation and/ore sale process.

2:30 pm May 13, 2024 Highlight

Spending slows, renters cut back: CBA

Eli Greenblat

The growing spending divide between younger people who rent and their parents and grandparents who either have a mortgage or own their homes outright is widening, as cost of living pressures force renters to slam the brakes on restaurants and pubs, ordering takeaways or spending up on expensive gym and sports memberships.

Spending by renters has lagged behind their home-owning counterparts since late 2022, according to new household spending research from the Commonwealth Bank, with the challenging economic environment disproportionately denting this cohort as they cut their budgets wherever they can to pay for mounting rents.

It’s a different world, however, at the other end of the spectrum where people who own their own homes outright with no mortgage – typically older Australians – continue to spend strongly and at around five times the growth of renters.

The latest CBA Household Spending Insights has revealed that in April on an annual basis renters spending grew by only 1.3 per cent while home owners with a mortgage grew spending by 4.5 per cent and owners with no mortgage grew spending across goods and services by 6.3 per cent. Given inflation is running at almost 4 per cent, it means that for renters they saw a fall in spending in real terms, the only cohort among the three to be negative.

It comes as the CBA HSI index fell 1 per cent in April to 148.11 following an early Easter bump in March, with annual spending growth slowing to just 2.6 per cent for the year.

The index remains below the 149.7 peak in January 2024. While spending on essentials like education (+3.7 per cent), utilities (+2.5 per cent) and motor vehicles (+1.7 per cent) rose in the month, consumers pulled back when it came to spending on food and beverage (-3.8 per cent), hospitality (-3.3 per cent) and recreation (-2.6 per cent), which dragged the index down.

2:16 pm May 13, 2024 Highlight

PwC to move to three divisions

David Ross

PwC Australia will restructure its business units, empowering three key divisions of the firm in the latest reorganisation of the audit and consulting giant.

The firm confirmed it would hand power to four key partners, who will lead newly minted Advisory, Assurance, and Tax and Legal operations, in a consolidation of the sprawling firm’s arms.

This move, which a PwC spokesman said represented a “realigning” of internal teams, will see no job losses and comes as the latest organisation of the firm after chief executive Kevin Burrowes outlined a new three-year strategy in April, which sees the firm prioritise its work in artificial intelligence, climate, business model reinvention, and trust in what matters.

“This realignment will enhance collaboration and ensure we are leveraging our multidisciplinary solutions to meet our clients rapidly changing needs,” a PwC spokesman said.

12:43 pm May 13, 2024 Highlight

Star depleted and leaderless, inquiry told

Glen Norris

Star Entertainment has been 'leaderless' as it faces growing regulatory and financial challenges, the Bell II inquiry has been told.

Counsel assisting the inquiry Caspar Conde said the troubled casino group needed a new chief executive, chief customer officer, chief legal officer and chief transformation officer among others to rebuild its depleted leadership team after a string of resignations in recent months.

Mr Conde said Star operated under a series of 'shadow values' that were contrary to its stated values. He said they could be summarised as 'profit first', 'play politics to stay alive', 'just get it done' and 'do more with less'.

Former chief executive Robbie Cooke and former chair David Foster had embedded a culture of 'us versus them' in regard to regulators, he said.

12:38 pm May 13, 2024

Lendlease sets investor day

Eric Johnston

Under pressure property developer Lendlease has told fund managers to keep the morning of May 27 free for its long-awaited strategy day, with the webcast also available on the day.

The presentation comes with the developer under intense pressure from investors including John Wylie's Tanarra Capital to split its costly offshore business from the better returning domestic business.

Lendlease first flagged the strategy day as late May when it delivered its interim results in February.

Earlier Monday, Lendlease confirmed a disputed tax bill of $112m.

12:24 pm May 13, 2024

Qld premier at supermarkets inquiry

Eli Greenblat

Queensland Premier Steven Miles has turned up at a Queensland parliamentary inquiry into the supermarkets to directly ask questions of a number of Coles executives appearing before a public hearing in Brisbane.

Mr Miles, who apologised for turning up late to the inquiry in what was a surprise appearance, began by asking Coles executives including chief of operations Matt Swindells about the way that the supermarket treats suppliers, uses rebates to charge suppliers money and its general operations.

The Queensland Premier is not listed as a member of the committee for the inquiry, but has turned up and is sitting among other Queensland MPs peppering Coles executives with questions.

12:05 pm May 13, 2024

Lack of staff blamed for falsified gambler welfare checks

Glen Norris

The falsification of welfare checks on gamblers playing for more than three hours had been blamed on a lack of staff resources, counsel assisting the Bell II inquiry tells the inquiry.

"These breaks force people who on any view have been gambling for a long period of time to potentially snap out of some sort of zone that they might be in, pause and take a break," said Mr Conde

"They need someone to come and intervene. If they're a problem gambler, the damage can be enormous for them and their families.

"Not only was that not happening here, which is obviously bad enough, but there were people lying about it to create records suggesting that there had been an intervention. There was a lot of evidence to the inquiry about guest support officers saying they just didn't have the resources.

"Of course there is no excuse for falsifying records, but it may go some way to explain the workarounds being deployed by them."

11:53 am May 13, 2024

ASX 200 flat before key events

David Rogers

Australia's share market is flat after an early dip as investors await key events.

The S&P/ASX 200 index is down 0.1 per cent at 7739.3 after falling to 7724.6.

The Federal Budget is due Tuesday, Australia's wage price index and US CPI data are out on Wednesday and Australian employment data are due on Thursday.

Most sectors are in the green, led by the consumer discretionary sector where Wesfarmers, JB Hi-Fi, Harvey Norman, Breville, Lovisa, ARB, Super Retail are up 1-2 per cent after sharp falls on trading updates last week.

The heavyweight financials sectors restrains the market as ANZ and Macquarie trade ex-dividend. ANZ confirmed it's being investigated by ASIC.

Energy is the weakest sector after a minor fall in crude oil prices.

LendLease falls 3.4 per cent as it fights an ATO tax assessment.

Fletcher Building dives 10 per cent after another profit warning.