Reliance first FY profit beats prospectus

Plumbing products designer and manufacturer Reliance Worldwide has exceeded its prospectus forecasts, reporting a net profit of $65.

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6 million in its first full-year financial results.

Revenue of $601.7 million for the 12 months to June 30 was up 12.6 per cent on its pro forma results the previous year, while earnings (EBITDA) of $120.7 million was 21.8 per cent better than the pro forma $99.1 million.

Net sales grew 2.4 per cent on the prospectus forecast while net profit after tax rose 4.8 per cent.

Driving the positive result was a continued expansion of Reliance’s SharkBite products business in North America which delivered strong sales growth in 2016/2017, mainly in the defensive repair, maintenance and renovation markets.

The Sharkbite business figures included a sales benefit in the second half from the initial rollout of product to approximately half of US company Lowe’s more than 1,700 stores.

Reliance, which listed on the ASX in April 2016, said improvements in gross margin had continued, driven by cost reductions, procurement savings and operational efficiencies.

Chief executive Heath Sharp said the company performed well across all its geographic and market segments.

He said Reliance’s growth in the year ahead would be helped by the company’s new plumbing fittings products and efforts in commercialising the latest “Internet of Things” applications for water flow monitoring.

Reliance forecast earnings (EBITDA) for 2017/2018 of between $145 million and $150 million, driven by strong top-line growth from the expansion of its business in the Americas, the inclusion of results from its newly acquired Holdrite business and opportunities to gain market shared in Asian Pacific and Europe, the Middle East and Africa.

Reliance shares closed 30 cents, or 8.9 per cent, higher at $3.66.

RELIANCE EXCEEDS EXPECTATIONS:

* Net profit of $65.6m, vs $52.1m pro forma

* Revenue of $601.7m, vs $534.4m pro forma

* Dividend of 3cps, fully franked

Banking regulator announces investigation into CBA

The Australian Prudential Regulation Authority, known as APRA, has announced it will investigate the Commonwealth Bank of Australia.

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In a statement APRA Chairman Wayne Byres said a number of concerns have been raised in relation to the governance, culture and accountability within the CBA group.

And that given CBA’s position in the Australian financial system, it is critical that community trust is strengthened.

CBA has had a tumultuous month.

First, Australia’s financial intelligence and regulatory agency, AUSTRAC, initiated proceedings in the Federal Court.

They allege CBA was involved in over 53,000 contraventions of anti-money-laundering and counter-terrorism financing laws.

That announcement saw CBA’s shares fall by 5.4 per cent.

Corporate regulator ASIC said it would investigate CBA’s behaviour, then embattled chief executive Ian Narev announced he’ll resign by July next year.

Last week, Maurice Blackburn lawyers said it was pursuing a potential class action for aggrieved investors.

And now APRA will investigate the culture of Australia’s largest bank.

Labor leader Bill Shorten says the Turnbull government can’t ignore calls for a royal commission.

“Well, here we go again. Yet again another inquiry into a bank. When will the Turnbull government finally do what it knows needs to be done and what the Australian people want which is to have a Royal Commission into our banks.”

Treasurer Scott Morrison says any shortcomings will be adequately addressed by both ASIC and APRA.

“This is a practical inquiry by APRA, it isn’t a show trial, it isn’t a political witchhunt, it isn’t any sort of political process. They are an independent regulator. The things that a Royal Commission could potentially recommend, we’re already doing it.”

David Ellis is an analyst with financial specialists Morningstar.

He says investigations into CBA shouldn’t be politicised.

“It’s important for all stakeholders – so that’s customers and staff and shareholders – that the inquiry is independent and is transparent and without any political interference. Without any political interference.”

In a statement CBA Chairman Catherine Livingstone acknowledged the community’s trust in the bank had been weakened.

She welcomed the inquiry and said APRA’s oversight would ensure transparency.

A final report from APRA will be made public and is expected six months after the inquiry officially gets underway.

 

Houston crippled by catastrophic floods

Tropical Storm Harvey is set to dump more rain on Houston, worsening flooding that has paralysed the country’s fourth biggest city, forced thousands to flee and swollen rivers to levels not seen in centuries.

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Harvey, the most powerful hurricane to hit Texas in more than 50 years, first hit land late on Friday and has killed at least two people. It has since stayed around Texas’ Gulf of Mexico Coast where it is forecast to remain for several more days, drenching parts with a year’s worth of rain in the span of a week.

Schools, airports and office buildings in Houston, home to about 2.3 million people, were ordered shut on Monday as scores of roads turned into rivers and chest-high water filled neighbourhoods in the low-lying city.

Torrential rain also hit areas more than 240 km away, swelling rivers and causing a surge that was heading toward the Houston area.

Authorities ordered more than 50,000 people to leave parts of Fort Bend County, about 55 km southwest of Houston as the Brazos River was set to crest at a record high of 18 m this week.

Brazos County Judge Robert Hebert told reporters the forecast crest represents a high not seen in at least 800 years.

“What we’re seeing is the most devastating flood event in Houston’s recorded history,” said Steve Bowen, chief meteorologist at reinsurance firm Aon Benfield.

US President Donald Trump plans to go to Texas on Tuesday to survey damage from the storm, a White House spokeswoman said on Sunday.

Trump, facing the first big US natural disaster since he took office in January, signed a disaster proclamation on Friday, triggering federal relief efforts. Texas Governor Greg Abbott said on Sunday 54 counties had been declared state disaster areas and he plans to add 1,000 more National Guard personnel to the flood battle.

Flood damage in Texas from Hurricane Harvey may equal that from Katrina, the costliest natural disaster in US history, an insurance research group said on Sunday.

The outages will also limit the availability of US crude, petrol and other refined products for global consumers and further push up prices, analysts say.

Houston’s George Bush Intercontinental Airport, one of the nation’s busiest, and William P. Hobby airport halted all commercial flights on Sunday. The airports remained closed to commercial traffic on Monday.

Two million pilgrims converge for this year’s Hajj

This year sees the return of pilgrims from Shiite Iran, regional rival to Sunni powerhouse Saudi Arabia, and comes with the Gulf mired in political crisis and Islamic State group jihadists squeezed in Iraq and Syria.

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“I’m so excited because many people dream of coming to this place,” said 47-year-old Eni from Indonesia, her face framed in a sand-coloured veil trimmed with lace.

“We feel more religious when we leave this place,” she said.

Indonesia is the world’s most populous Muslim nation, and it also provides the largest number of pilgrims for the Hajj.

Eni’s compatriots throng Jeddah airport 80 kilometres (50 miles) west of Mecca, as tens of thousands of pilgrims pass through the gateway to the Hajj every day.

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But Eni is almost oblivious to the hubbub that surrounds her as she studies her Koran in the oppressive heat, pearls of sweat beading her face.

“After my first pilgrimage I felt I wanted to come back to feel myself close to him,” she said of the Prophet Mohammed before returning her attention to Islam’s holy book.

The Hajj is one of the five pillars of the Islamic faith, which every Muslim is required to complete at least once in a lifetime if he or she has the means to do so.

“This year we expect around two million pilgrims,” Abdelmajeed Mohammad Al-Afghani, director of Hajj and umra (lesser pilgrimage) affairs, told AFP.

The queue for immigration and passport control at the Hajj terminal of the King Abdulaziz international airport in Jeddah, Saudi Arabia (AAP)AAP

Politics and the Hajj

Iranians are back after not attending in 2016 following a deadly Mecca stampede the previous year that killed nearly 2,300 pilgrims.

It was the worst catastrophe in the history of the Hajj, with 464 people from the Islamic republic among the dead.

Following the disaster, Tehran railed against Saudi Arabia’s organisation of the pilgrimage.

The two countries then severed diplomatic relations in January 2016 after the Saudi embassy in Tehran was ransacked by a crowd protesting against the execution in the kingdom of a Shiite religious dignitary.

Analysts say that neither Riyadh nor Tehran has any wish to prolong the dispute.

“To politicise an event like this does no good,” according to Slimane Zeghidour, author of “La vie quotidienne à La Mecque: De Mahomet à nos jours” (Daily Life in Mecca from Mohammed to Today).

Accusations of the Hajj being politicised have marred the region for some time.

For nearly three months, the Gulf has been embroiled in its worst ever political crisis, with Saudi Arabia and its allies facing off against Qatar, which they accuse of being too close to Iran and backing extremism.

A boycott imposed on the small but gas-rich emirate since June 5 has resulted in Qatar’s land, sea and air links being badly affected.

This has also had a knock-on effect on Hajj-related travel, although Riyadh announced it was relaxing certain restrictions for pilgrims.

‘Every time it’s different’

In the arrivals hall at Jeddah airport, determined pilgrims walk hastily to avoid losing contact with other members of their group.

“I’m so happy to be a part of it this year,” said 43-year-old Nigerian Mohammed Said, in the seamless two-piece white garment or “ihram” worn by male pilgrims.

“I want to do it every year if I can afford it,” added Said who is in Saudi Arabia for his third Hajj.

“Every time it’s different — it’s like I’m doing it for the first time.”

For author Zeghidour, going on the Hajj takes pilgrims to another level altogether.

“The pilgrim has to run, move, and perform several stages” of the ritual.

“It is so physically and mentally demanding that he doesn’t have time to think about the crisis in the Gulf. For him this is literature.

“Many pilgrims come from Asia or Africa, far from the Middle East, and they come to a place where they can try to forget their lives back home.”

Murderous jihadist attacks across the world in recent years will be on the minds of many pilgrims, especially those from Iraq and Syria where the IS has suffered a series of setbacks.

But the threat from extremists has not put off pilgrims such as Fatima, from Perpignan in southern France.

“I’ve been waiting to go on this journey for a long time,” she said, wearing a red veil like the other people in her group.

Peachey serves it straight to Sea Eagles

There’s plenty of pressure on Penrith with a finals spot on the line against Manly this weekend but that hasn’t stopped an assured Tyrone Peachey simply declaring “we’re a better team than them”.

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The loser could miss out on the NRL top eight depending on how seventh-placed North Queensland and ninth-placed St George-Illawarra fare in the last round.

Panthers centre Peachey on Monday lit the fuse for a fiery NRL clash when he was asked how difficult it would be to travel to Lottoland on Saturday.

“I think we’ve done it the last couple of years,” Peachey responded.

“It is obviously hard but if we play good I think we’re a better team than them.”

Peachey is right: the Panthers have won their last five against Manly and haven’t lost at Brookvale since 2014.

But when it was repeated by reporters to Manly players at Sydney airport on Monday, it wasn’t so well received.

“Good on him,” Sea Eagles prop Brenton Lawrence said.

“We’ll see Saturday.”

Lawrence will play his last home game for Manly on Saturday, and admitted he’d likely be emotional at fulltime.

Manly will also farewell club legends Brett Stewart, Steve Matai and Matt Ballin, who all had their careers officially ended by injury this season.

But if they needed any more motivation with their season on the line, Peachey’s comment was sure to do the trick.

If North Queensland beat Brisbane on Thursday night, the loser of Saturday’s match will need Canterbury to beat St George Illawarra, otherwise they will be out of the finals.

Regardless, Manly admit they will have to be better than they were against the Warriors.

The Sea Eagles trailed by seven points with five minutes to play before Tom Trbojevic and Daly Cherry-Evans sent the game into golden point.

It snapped a run of four losses in five games, but fullback Trbojevic has warned they must be far better if they want to play finals.

“We’ve got a lot to work on,” he said.