oh no. citigroup cuts nlx forecast to 4 cents

It cut its price target to 4c

http://www.smh.com.au/news/xchange/jewels-jugs-pots-and-pans-are-out/2006/05/22/1148150186512.html?page=2


Jewels, jugs, pots and pans are out
Email Print Normal font Large font May 23, 2006
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Ungrateful consumers are exercising too much discretion with their discretionary spending.

THERE are still signs of weakness at the discretionary end of the retail market judging by yesterday's profit warnings from Solly Lew's Housewares International and jeweller Angus & Coote.

Some major fund managers were among those taking a hit yesterday when Housewares, the wholesaler and importer of brands like Breville and Kambrook, massaged its profit guidance down by as much as 20 per cent.

Its shares slumped 18 per cent.

The fortunes of both Housewares and Angus & Coote show how retailers are struggling with both muted consumer demand and higher input prices.

Housewares and Angus & Coote both blamed "challenging" conditions, no doubt referring to petrol prices and interest rates and warned the malaise is continuing.

But Angus & Coote, which released its profit warning after the market closed, added that the challenging conditions were aggravated by world gold and silver prices.

"Net profit after tax is now likely to be below break-even for this financial year."

They might be tiddlers at the discretionary end of things but there will no doubt be some nervous punters watching third quarter results this week from Coles Myer and David Jones.

Rupert and the Prince

There's a bit of talk emerging from Cannes that well-known film buff Rupert Murdoch appears set to buy a stake in Saudi Prince al-Waleed bin Talal's media group Rotana.
In its special film festival issue, Variety said that the size of the stake and how much Murdoch would pay had not been finalised.

Rotana is apparently the dominant media group in the Middle East, with six TV channels, the region's most influential music label and a film production segment.

Although it was launched only two years ago, it now accounts for half of all Arab film production, with 22 movies produced in 2005.

Bin Talal, supposedly the world's eighth-richest man, is the third-largest shareholder in Murdoch's News Corp and has significant stakes in Time Warner and Disney.

Murdoch is negotiating to buy into Rotana before it goes public next year, Variety said.

Up garden path

Citigroup has given up on garden products maker Nylex.
They've cut their share price forecast, cut their rating and cut and run on their coverage altogether.

"This follows the release of another profit warning, the foreshadowing of another restructuring program and news that the company is in discussions with potential financiers to raise money to complete the program," analyst Julian Mulcahy said. "Each of these raises concerns over Nylex's long-term future.

"Most alarming is the statement that the company is in discussions with potential providers of subordinated debt and mezzanine capital, and a range of existing and potential senior debt providers.

"Given its extremely weak bargaining position, there is a major risk that Nylex (and therefore current shareholders) will get a raw deal.

"Regardless of whether or not the latest restructuring initiative makes sense or even works, the history of downgrades and false dawns will no doubt raise issues in the minds of investors."

Cutting its recommendation on the stock to a sell, Citigroup said there was more to go.

It cut its price target to 4c. Shares have close to halved in a week, closing yesterday at 5.5c.