Metcash Limited (ASX:MTS) is a leading marketing and distribution company operating in the food and other fast moving consumer goods categories. MTS operates via three business units: IGA Distribution (retail), Campbells Cash & Carry (wholesale) and Australian Liquor Marketers (ALM; liquor wholesale).

Metcash today released its first half results, which showed a 14% decrease in 1H profit to $94.4 million.

The company said the decrease was due to grocery price deflation, economic uncertainty and a cut in margins due to increased competition.

Metcash said it expects low-to-mid single digit earnings growth for the full year.

MTS will pay an interim dividend of $0.115.

Click to Receive FREE Trading Recommendations!

Wesfarmers (ASX:WES) is Australia’s leading conglomerate, headquartered in Perth, Western Australia.  It is also widely considered among the market’s blue chip stocks.

The company owns several iconic Australian businesses, including supermarket chain Coles, hardware retailer Bunning’s Warehouse, discount department stores Target and K-Mart, and office supplies provider Officeworks. WES also involves in industrials supplies distribution, coal mining, fertilisers, chemicals and general insurance.

Today, WES announced that it has sold its Premier coal mine to Chinese-based Yancoal, for $296.8 million.

The deal needs approval from Australian and Chinese regulators, and WES said that the sale would generate an additional $90 million in pre-tax profit.

Receive FREE Trading Recommendations for the next 7 Days, Click Here!

Goodman Fielder (ASX:GFF) is Australasia’s leading listed food company, delivering products to over 30,000 supermarkets, convenience stores and food service customers throughout Australia, New Zealand and the Pacific Islands.

The company owns a host of iconic bakery and dairy brands, including Meadow Lea, Praise, White Wings, Pampas, Mighty Soft, Helga’s, Wonder White and Irvines.

GFF has announced a $259 million capital raising to improve its balance sheet flexibility.

The group warned that trading conditions were difficult in its baking and dairy divisions, as it contended with higher commodity prices and reduced demand for its brand name products.

It has been one of the shares to sell in recent times due to these problems.

The new equity will be priced at 45 cents a share, representing a 24% discount to its last closing price.

Receive FREE Trading Recommendations for the next 7 Days, Click Here!

Coca-Cola Amatil (ASX:CCL) is an Australasian bottler for US-based The Coca Cola Company.

CCL manufactures, sells and distributes Coca-Cola products, including carbonated soft drinks, mineral waters and other non-alcoholic beverages, plus packaged fruit.

It is also considered among the market’s blue chip stocks.

Over the years, the company has successfully reduced its percentage of sugary carbonated beverages and increased its percentage of non-carbonated beverages, alcoholic beverages and food, in order to diversify its earnings stream.

It has also ventured into the manufacture and distribution of premium beer brands and the premium spirit portfolio of global distributor Maxxium through Pacific Beverages (a JV entity between CCA and SABMiller).

The company delivered a solid first half result last month helped by its strategic product positioning in key markets.

Market ace

CCL stands to benefit from SABMiller’s takeover of Foster’s Group. The move is likely to result in the Pacific Beverages joint venture being dissolved.

CCL management estimates it could book a profit of $200-$300 million on the $305-$380 million sale of Pacific Beverages to SABMiller.

From an EPS perspective, this would be equivalent to a 2%-3% accretion.

CCL will also have the opportunity to acquire some of Foster’s assets at multiples that would be EPS accretive to CCL.

As an overall entity, CCL has grown from strength to strength in recent years. The company’s diversification strategy has been key to this growth, which has included the addition of alcoholic beverages.

Drink up to earnings

CCL last month reported a 27.8% decline in 1H11 net profit to $153.6 million.  An interim dividend of 22 cents was declared.

The result was impacted by an $80.5 million charge related to the restructuring of its SPCA Ardmona division.

Underlying profit rose 5.5% to $234.1 million, with revenue growing 3.3% on-year despite the impact of the recent flooding and consumer caution.

At an AGM in June, CCL had said it was looking to target around 5% growth in underlying profit for the 1H11.

The group has been hurt by the strong Aussie dollar, natural disasters and higher resin prices.

Before currency translation effects, first half profit was expected to be around 6% – 7% higher than the prior year.

CCL was expecting to generate stronger earnings in the second half, but said trading conditions remained uncertain as consumers contended with higher living costs.

Taking into consideration the adverse factors CCL faced during the period, we feel the company delivered a solid result.

Looking ahead

CCL will continue to focus on capitalising on its growing alcoholic beverage and non-carbonated soft drinks market, which are growing owing to modern lifestyle trends.

The company has strong brand awareness, and very stable and highly predictable cashflow compared to its peers.

Coca-Cola Amatil is a defensive company which is protected against inflation as it can pass costs on to customers, who are always willing to spend money on CCL’s famous brands.

With the potential for significant earnings upside from the Foster’s takeover, we feel CCL is in a lucrative position.

Receive FREE Trading Recommendations for the next 7 Days, Click Here!

Wesfarmers (ASX:WES) is Australia’s leading conglomerate, and one of the most widely know blue chip stocks in the Australian share market.

Since listing on the ASX in 1984, the company has recorded strong growth in assets and profits.

The company owns several iconic Australian businesses, including supermarket chain Coles, hardware retailer Bunning’s Warehouse, discount department stores Target and K-Mart, and office supplies provider Officeworks. WES also involves in industrials supplies distribution, coal mining, fertilisers, chemicals and general insurance.

Today, WES reported its full year results.

FY11 net profit climbs 22.8% to $1.92 billion, exceeding analyst estimates of a $1.88 billion profit.  A final dividend of $1.50 was declared, also beating estimates.

Coles earnings growth outpaced sales growth, reflecting operational efficiencies at the division.  Kmart and Bunnings also recorded earnings growth.

However, Target EBIT slumped 26.5% due primarily to price deflation and clearance activity.

Revenue at the Coal division grew 25.6% on-year, with record export prices and strong demand offsetting the impact to production from the early-year flooding.

WES was optimistic about the outlook given solid operating fundamentals, but said its outlook was subject to any adverse shocks from the fragile global economy.

Click to Receive FREE Trading Recommendations for the next 7 Days!

Australian Agricultural Co. (ASX:AAC) is the oldest continuously operating company in Australia, supplying domestic and export beef consumers.

AAC is the largest beef cattle company in Australia, and is managed from Brisbane, with regional management located on each station. The business also has one of Australia’s leading composite breeding programs.

AAC has been one of the shares to sell since April, tumbling from a high of $1.70 to current prices around $1.40.

On 25 July, AAC reported a 1H11 net loss of $12.6 million.  This compares to a net loss of $12.2 million a year earlier.

However, revenue jumped 53% on-year to $58.2 million, driven by an increase in cattle sales and favourable seasonal conditions.

AAC reaffirmed FY11 EBITDA guidance of $50 – $60 million, taking into account the Meteor Downs station sale, favourable market conditions and the government’s repeal of the live cattle ban.

Click to receive FREE Daily Stock Recommendations for 7 Days!

Foster’s Group (ASX:FGL) is a brewing and wine company with a global presence, and whose core operations include Carlton and United Breweries.

In April, FGL shareholders agreed to the beer brewer’s plans to demerge its wine making division.

The division, known as Treasury Wine Estates, was separately listed, whilst the demerger was expected to provide greater flexibility for both companies going forward.

The demerger also increased the likelihood that both divisions could become takeover targets.

Out of Africa

FGL this week rejected a $9.51 billion takeover offer from South Africa’s SABMiller.

The $4.90 a share offer is at an 8.2% premium to FGL’s Monday closing share price.

FGL believes that the proposal significantly undervalues the company.

The move comes after FGL’s recent demerger.

FGL shares have rallied significantly since rejecting the offer as most analysts feel the bid will spark a bidding war.

Click here for Daily ASX News & Advice

Metcash Limited (MTS) is a leading marketing and distribution company operating in the food and other fast moving consumer goods categories.

MTS operates via three business units: IGA Distribution (retail), Campbells Cash & Carry (wholesale) and Australian Liquor Marketers (ALM; liquor wholesale)

Metcash announced solid FY11 results today, with profit up 6.1% to $241.4 million.

Underlying earnings rose 6.1%, but operating cash flow was disappointing, sliding 51.6%.

The company declared a 16 cent final dividend, bringing total dividends for the year to 27 cents.

Despite the mostly positive results, the company did issue a cautious outlook, saying conditions are likely to remain challenging for the rest of 2011.

The market was reasonably happy with the results as MTS shares gapped up a couple of percent this morning on the news before pulling back to close up 0.5% at $3.90.

Click to Access FREE Daily Shares Advice Now

Elders (ELD) is one of Australia’s most historic companies, having been an advisor, supplier and agent for Australian primary producers for 170 years.

ELD incorporates the Elders rural services and financial services businesses and the forestry and automotive operations acquired and developed by Futuris Corporation.

The group was one of the shares to sell following the GFC, plummeted from a high near $30 to current levels around 50 cents.

On 23 May, ELD reported a 1H11 net loss of $14.6 million.  This compares to a $165.9 million loss a year earlier.

The result was affected mostly by debt restructuring costs, with the group actually reporting an underlying profit of $1 million.

Underlying EBIT rose 94% on-year, with the Rural Services division contributing most to the result due to an improvement in network performance.

However, Elders downgraded its full year profit forecast to $7.5 million – $24.5 million amid uncertainty about the outlook for its Automotive and Forestry divisions.

ELD tumbled over 9% on the day, making it one of the worst performers in the Australian share market.

FREE Daily Sell Shares advice

Graincorp (GNC) provides handling, storage, marketing, and logistics to the Australian grain growing industry.

The company is also the primary bulk handling company on the east coast of Australia, servicing a growing number of domestic and export grain buyers.

GNC saw plenty of volatility over 2006-2008 owing to severe drought conditions prominent across key crop regions in Australia.

Natural disaster events such as floods and the recent earthquakes have also threatened operations.

Things have since turned around for GNC on the back of some strategic business moves.

Last year, AWB Ltd (AWB) and GNC considered a merger of their operations but this did not materialise as AWB’s board opted for a takeover offer from Agrium valuing it at $1.24 billion.

GNC finally managed to grow its business through the acquisition of the Kirin malt house in Perth from Kirin brewery.

Towards the end of last year, Graincorp reported a 27% rise in FY10 net profit to $80.2 million with the contribution of GNC’s new malt business was a key driver of the result.

Key strategic moves

Over the past three years, GNC has made a range of strategic improvements. Graincorp has diversified earnings and geography with the acquisition of an international malt business.

The company has entered the bulk wheat export market following the removal of the single desk monopoly.

The Australian grain industry has become more international following the move with future growth likely to be underpinned by favourable Asian demand.

GNC has secured its rail haulage capacity and aligned its operating structure with an improved customer focus.

The company is looking increasingly bullish following a recent solid trading update and strong demand and pricing for agricultural products.

FY results

GNC recorded a 27% rise in FY10 net profit to $80.2 million, with the result coming in comfortably within company guidance of $75 million to $90 million but at the lower end.

This result was built on a 20% on year jump in revenue to $2 billion.

The contribution of GNC’s new malt business was a key driver of the result, although this was offset by a slump in trading revenue due to a decrease in grain prices.

GNC was cautious about its outlook and refused to provide FY11 guidance, saying instead there was continued uncertainty on grain volume and quality, as well as harvest timing.

GNC declared a final dividend of 10 cents per share, whilst its share price sank 9.6% on its uncertain outlook.

Looking ahead

GNC is poised to grow as an integrated, international and competitive agribusiness.

Australia supplies 15% (approximately 140 mmt) of globally traded wheat and barley.

With the world population set to grow and with 40% of this growth in countries where Australia has a grain supply freight and quality advantage, we feel GNC is in a prime position.

Wheat and barley import demand is forecast to grow by 2.5% per annum over the next 8 years.

Graincorp will continue to look at organic growth and accretive acquisitions.

A higher Aussie dollar remains a threat for GNC’s huge export business. Any pullback in the Aussie dollar would give GNC further upside.

GNC has reduced its core debt gearing to less than 25% in recent years. This low debt structure provides GNC with a solid platform for growth, making it one of the stocks to watch.

Click for FREE Professional Trading Tips