We don’t need two spinners, says Lyon

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Australia don’t need two specialist spinners in the second Ashes Test in Adelaide, according to Nathan Lyon, who says he’s learned plenty since last year’s drawn Test with South Africa at the same ground.

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Against the Proteas, Australia had a series-clinching Test victory in their grips – requiring just six wickets on the fifth day at Adelaide Oval.

The scene was tailor-made for offspinner Lyon to be the hero on his former home ground, but instead South African middle-order batsman Faf du Plessis earned the plaudits as he batted for seven-and-a-half hours, accumulating 110 not out, to force a draw.

The result raised questions about Lyon’s match-winning ability – but he says he’s learned and grown from that disappointment.

“I’ve learnt a fair amount playing a few Test matches down there,” said Lyon on Tuesday.

“I’ve learnt a fair amount about my game and what I need to do and what I need to do to get better.

“Fingers crossed there’s a little bit more spin down there and we’ll see how we go.”

And, striking a blow to the hopes of legspinner Fawad Ahmed and rising offspinner Ashton Agar, Lyon said he’s ready to go it alone – almost.

“Steve Smith, Michael Clarke – they’re pretty capable of bowling a few overs,” Lyon said on Thursday.

“In saying that if the bowling group does our job they (part-time spinners) won’t have to bowl.

“I’m more than happy to take on the responsibility of being the No.1 spinner and hopefully get a few overs under my belt.”

Lyon, who sparked English collapses in both innings of the 381-run first Test win at the Gabba, has been dropped on two occasions this year.

Firstly in spin-friendly India he was overlooked for Xavier Doherty, then little-known Ashton Agar was picked for the opening two Ashes Tests in England.

And the pressure will again be on for the 26-year-old to deliver at Adelaide, where he used to be the groundskeeper and has taken 10 wickets at 25 in two Tests.

But it’s a challenge he is embracing.

“I feel confident in my own skill-set to get the job done,” he said.

Lyon said Australia can’t afford to back down from their aggressive tactics because they know England won’t roll over.

“It’s England and it’s a Test match, they’re going to bounce back, we know that,” he said on Thursday.

“Test match cricket is the hardest format going around.

“We’re not expecting anyone to roll over. We know the quality of the England cricket side.

“We’re going to have to stand up … and start that fight again.

“…That’s the way Australia play their best cricket.

“We know where the line is and we don’t step over it.

“We’re going to continue to play aggressive, hard cricket.”

Comment: Chinese appetite for pecans boosting pie prices

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What’s more American than apple pie? Pecan pie.

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The world’s first apple tree grew in Asia millennia ago. But the pecan tree is a native American. How appropriate, then, that pecans enjoy a place of honor on the table at Thanksgiving, a deeply homegrown holiday.

But hold the whipped cream. Pecan pie is expensive this year! Where I live in Austin, Texas, pecan pies are clearing $20 each at bakeries around town. In coastal cities like New York and San Francisco, where labor and overhead are higher, a 9-inch pie can set a pilgrim back as much as $34. Even at these prices, bakeries are selling pecan pies at a loss. Why so costly?

The cost of pecans is fully exposed to the economic push and pull of supply and demand — the government doesn’t support pecan prices the way it does sugar prices, for instance. So when the most populous country in the world suddenly developed an insatiable and totally unprecedented hunger for pecans, demand skyrocketed. The price of pecans did, too.

James McWilliams (an occasional Slate contributor) tells the story in his new book, “The Pecan: A History of America’s Native Nut.” The year was 2006, and the scene was a food trade show in Paris. An official from New Mexico’s Department of Agriculture introduced a group of Chinese buyers to pecans, an important crop for that state. “The Chinese cracked them open, sampled them, and were intrigued — so intrigued,” writes McWilliams, “that they traveled to New Mexico to meet growers, tour orchards, and discuss tentative contracts.” At the time, China didn’t import any pecans, and it didn’t (still doesn’t) grow any, either. No one in China ate pecans.

And yet, after only a couple of years and a bit of savvy marketing, a craze for pecans had gripped the Chinese like quinoa in California. Advertisements touted their antioxidants, claiming them capable of extending life and fending off Alzheimer’s. China’s exploding middle class has disposable income and considers the pecan a snack worth splurging on. The Chinese now eat pecans like we eat pistachios — partially shelled and brined, then roasted for extra salty-crunchy goodness.

By 2009 China had gone from not having a word for “pecan” to importing 83 million pounds — a quarter of the U.S. crop. With a public willing to pay between $10 and $15 a pound, importers began actively courting pecan growers in other states, like Georgia and Texas. “In 2005,” writes McWilliams, “pecans were a novelty item in China. Today they can be found, as one newspaper reports, ‘at gas stations, airports, and every grocery store in China.’ “

An old pecan just isn’t as pretty as a fresh pecan, and pretty matters-especially when people are paying more than $20 for a pie.

What does that mean for American pecan growers? Jake Montz planted his first pecan trees in 1987 and now grows some 25,000 trees’ worth on his farm in Wichita Falls, Texas. These days about 25 percent of his crop goes to China. He sells another quarter in his own two nut shops, and the remainder goes to a shelling company that will, in turn, sell the nutmeats to grocery stores and companies that manufacture ice cream and breakfast cereals.

Conditions this year have squeezed his supply even more than usual. Severe drought in Texas has stretched on for three years now, and the pecan trees have suffered. Making matters worse, three late freezes decimated this year’s crop. But he still has to pay his ever-rising costs — fuel, electricity, equipment, labor. Fortunately, high demand both domestically and from China means prices are high. “I’d rather have a big crop and sell them a little cheaper,” says Montz. Unfortunately, that’s not happening this year.

Professional bakers would love for pecans to be a little cheaper, too. In the mid-1990s, my local bakery, Texas French Bread, sold pecan pies for $10 to $12 each ($15 to $18 in today’s dollars). Today, owner Murph Willcott pays more than $11 a pound for the fancy pecan halves that go into pies he can afford to sell only at Thanksgiving. Chopped nuts, usually sold as “pieces,” would be cheaper, but the pies wouldn’t look as nice. “The halves are prettier,” he says, “so we try to use them.” Willcott also values the freshest nuts. Though some bakers use nuts that are a year or two old, he says, “What you want is the one that’s just been shelled, that is really beautiful and perfect. Those are really hard to find at this point.” As a pecan ages, with or without its shell, it loses moisture and thus plumpness. An old pecan just isn’t as pretty as a fresh pecan, and pretty matters — especially when people are paying more than $20 for a pie.

Willcott’s pecan pies will sell for $22 this year, but that won’t cover the cost of making them. “So we’ll eat it on that one,” he says, “and our margin won’t be what we want it to be. But we’ll make them anyway.” Another Austin bakery, Walton’s Fancy and Staple, has addressed pecans’ soaring cost by pricing all its Thanksgiving pies at $22. This way, the lower cost of producing pies made with ingredients that happen to be cheaper — pumpkin, for instance — helps offset the more expensive pecan. But even using this strategy, Walton’s has had to raise prices over the past several years, says culinary director Justin Raiford.

What does the pecan boom mean for people who bake their own pies? In 2008 pecans retailed for $3.50 a pound, according to McWilliams. In 2010 they were up to $6.95. Now, at my local grocery store, I pay $10.99 for pecan halves and $9.99 for pieces. My pecan pie recipe calls for three-quarters of a cup of each.

That means pecans are now the most expensive item when I prorate the prices on my ingredient list. Butter comes next (we use organic), then the corn syrup (don’t judge me before you taste my pie), and maple syrup (Vermont’s a long way away). When I add it all up, I find it will cost me $11.73 to make a pecan pie from scratch. Of course, we’ll have to double that at Thanksgiving. One pecan pie is never enough.

Goulart writes about the geography of food.

Copper pits for NBN a "disgrace": Union

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The union representing Telstra field staff estimates up to 80 per cent of the telco’s “disgraceful” copper-wire network pits have been patched together by plastic bags or ring-barked cables.

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It’s the very same copper network NBN Co plans to buy or lease off Telstra for the fibre-to-the-node national broadband network (NBN) being championed by the Abbott government.

“This would be a fraud on the Australian taxpayer,” CEPU NSW assistant secretary Shane Murphy told a Senate hearing on the NBN in Canberra on Thursday.

Mr Murphy said 75 to 80 per cent of Telstra’s copper pits were as rotten as the pictures he brought to the Senate committee, which showed the ageing network being crudely held together by ring-barked cables and covered by plastic bags in a vain attempt to keep water out.

“This is the exact network that will be sitting outside there, tying into the NBN that is built to the node,” he said.

Mr Murphy said the network was in reasonably good condition when Telstra was privatised in the late 1990s.

However, proper maintenance of the network’s copper pits had since disappeared.

“Telstra has been consistently pushing workers to simply get the customer services up and running, band-aiding the network, and moving the employee or contractor quickly onto the next job,” he said.

Telstra would have no idea just how bad things were in the copper pits, Mr Murphy added.

“Workers and contractors are now so frustrated with what they’re working in, and without being given the adequate responsibility to be able to fix it appropriately, they’re not reporting them.”

Mr Murphy said the communications union is about to begin a campaign in a number of electoral seats around the country to highlight the issue.

Earlier on Thursday, the Senate select committees summonsed NBN Co chief Ziggy Switkowski to front a parliamentary inquiry.

Dr Switkowski and other senior NBN executives have said they are reluctant to appear before the committee in person.

The committee has issued a summons requiring their presence at an inquiry hearing in Canberra on Friday.

Committee chair Kate Lundy said on Thursday the summons had been issued with regret, given the government’s public commitment to openness and transparency in matters relating to the NBN.

The Senate has asked the committee to inquire into the government’s reviews of the NBN and the governance of NBN Co.

PM wants Qantas to remain a ‘successful Australian icon’

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But Qantas chief executive Alan Joyce says removing foreign ownership restrictions on the airline in parliament would not be “realistically achievable”.

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“We don’t think it is realistically achievable in the current parliament,” he said in a statement to staff this morning.

“And the process would be prolonged, during which time Virgin Australia would be free to continue its anti-competitive strategy aimed at crippling Qantas. We simply do not have the time.”

Mr Joyce said Qantas needs more government support to reflect its status as the country’s national carrier. He said compared to other countries, Qantas receives no government concessions and no preferred access to Australian airportss.

“There are a range of policy measures that the government could consider in order to provide a more level playing field for the aviation sector in Australia.

“Qantas looks forward to discussions with the government about potential steps to level the playing field and support the national carrier.”

Earlier today, Federal Treasurer Joe Hockey described foreign ownership rules applied to Qantas more than two decades ago as “regulatory handcuffs”.

The treasurer wants a national debate on whether Australian investors should retain majority ownership of the flying kangaroo, arguing it could restrict the listed carrier’s growth in the long run.

“If Australians want to place regulatory handcuffs on Qantas then we need to accept that that will come at a cost,” Mr Hockey told reporters in Sydney on Thursday.

“Frankly, it’s not something that I am willingly prepared to do.”

Mr Hockey first made his views known about the 49 per cent foreign ownership cap at a forum in Sydney on Wednesday, prompting a more than three per cent jump in Qantas’ shares on Thursday.

As at March, foreign investment in Qantas, which has a market value of $2.6 billion, was 39.8 per cent. The majority of this share is held by two US investment groups.

Opposition Leader Bill Shorten said Labor believes Qantas should stay in Australian hands.

“I believe the national carrier is an important part of Australia’s national security, it’s an important part of Australia’s independence,” he told reporters in Canberra.

Mr Shorten described Mr Hockey’s elevation of the issue as a “thought-bubble”, saying such issues should be discussed in the parliament.

“I would say to the treasurer these are important matters, they are also market sensitive matters,” he added.

However, Mr Hockey said the former Labor government was fully aware of the challenges facing Qantas in a changing and increasingly competitive airline market, but didn’t do anything about it.

“Bill Shorten is more interested in crisis management than crisis aversion,” Mr Hockey said.

“We don’t want to have to come back to deal with this in 12 months or 18 months.”

Independent senator Nick Xenophon is wary of any relaxation of the foreign ownership rule, saying this could make Qantas vulnerable to a private equity or foreign takeover.

“My fear is the Qantas we know today will just become a shadow of itself,” he said.

Labor transport spokesman Anthony Albanese said Qantas made important contributions both domestically and overseas.

“Whenever national governments have needed assistance, Qantas has been there,” he told ABC radio.

The Australian and International Pilots Association (AIPA) has also called for the Qantas Sale Act to be changed.

“We are very satisfied to see the treasurer’s comments,” AIPA President Nathan Safe said.

US bid to destroy Syrian chemicals at sea

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The Obama administration is offering to destroy some of Syria’s deadliest chemical weapons in international waters aboard a US government-owned ship, US officials say.

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The plan, still subject to final approval, would involve destroying the weapons, likely aboard the MV Cape Ray in the Mediterranean Sea, with US navy warships patrolling nearby.

This approach would avoid the vexing diplomatic, environmental and security problems posed by disposing of the materials on any country’s soil.

The decision to proceed with the chemical disposal plan would be made by the Organisation for the Prohibition of Chemical Weapons, a global chemical weapons watchdog agency with 190 member states.

In a statement on Wednesday in the Netherlands, the watchdog agency said the effort to ship Syria’s chemical arsenal out of the country “continues to pose challenges due to the security situation on the ground”.

No country has committed to disposing of the chemical weapons on its own soil, which is why the US offer to destroy the deadliest of the chemical components at sea is seen as a likely option.

The US officials who disclosed aspects of the US portion of the plan spoke on condition of anonymity because they were not authorised to talk about it by name.

The MV Cape Ray would host the destruction of some of the deadliest of Syria’s chemical materials using a process developed by the Pentagon but never employed in an actual operation.

The US would use what it calls a mobile Field Deployable Hydrolysis System to neutralise the chemical material, making it unusable as weapons.

The system was developed by the Defense Threat Reduction Agency, which is an arm of the Pentagon.

The titanium reactor uses heated water and other chemicals to make the chemical warfare material inert.

According to several US officials, two of the hydrolysis units would be mounted on the Cape Ray.

It will take some time to retrofit the ship and conduct training to insure that the process can be done successfully at sea.

As of Wednesday, US officials said they are still trying to determine how the chemical warfare materials would be moved from Syria to the US ship.

They said they expect that another country will provide a ship for that part of the task.

Officials said they expect a final decision soon and the operation would begin by the end of the year.

US hot sauce factory must cut smell: court

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A US judge has ordered a factory that produces the popular Sriracha chilli sauce to stop emitting annoying odours in a ruling that has left some nearby residents worried about a possible loss of jobs at the site.

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Judge Robert H. O’Brien on Tuesday ruled in favour of the city of Irwindale, where Sriracha recently relocated, saying sauce maker Huy Fong Foods must stop any operations that could be causing the odours and make unspecified changes to mitigate them.

The company had no immediate comment, but a few neighbours interviewed on Wednesday dismissed the complaints and worried that jobs might be lost if the plant is forced to close.

“I don’t want it shut down because I think a lot of people will lose their jobs,” said Marta Torres, 47.

“In two years it has never smelled as much as now, but I think it’s OK.”

Torres said the smell wafts into her home late in the day in an area where many of her neighbours like to cook with spices.

“It’s something you can deal with,” she said.

“It doesn’t bother us.”

O’Brien’s preliminary injunction was issued in response to a lawsuit filed October 21 by Irwindale, a small industrial city east of Los Angeles and home to nearly 1500 people.

It wasn’t immediately known if the food company plans to appeal.

The company has said there is no reason to close the plant now because harvest season and the subsequent grinding of red-hot jalapeno peppers – the key ingredient of the sauce – have passed.

As a result, the injunction might not have an immediate impact on the company’s production or the country’s hot sauce supply as Huy Fong continues its year-round mixing and bottling.

The judge acknowledged there was a lack of credible evidence linking complaints of breathing trouble and watery eyes to the factory.

But he said for residents the odour that could be reasonably inferred to be emanating from the facility is “extremely annoying, irritating and offensive to the senses warranting consideration as a public nuisance”.

Some residents said living with the smell is bearable.

Randall Acosta, 45, who lives in an apartment complex across the street from the factory, said the scent can be strong sometimes but it makes him hungry.

“Why are people complaining about the chilli smell when this is an industrial area?” he asked.

“There’s burning rubber down the street. There are other dangers in this city.”

The case could still go to trial, but Irwindale officials would like to see a settlement outside court and do not want to shut down Sriracha altogether, City Attorney Fred Galante told the Los Angeles Times.

“We’re going to try to keep having a conversation with Huy Fong,” he said, and find a collaborative way to address the odour problem.

Comment: Big money made on social apps as gambling and gaming collide

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By César Albarrán Torres, University of Sydney

The ban on social media gambling was legislated in 2001, through the Interactive Gambling Act and reaffirmed through a departmental reviewed released in 2013.

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The act made it illegal for Australian companies to offer real-money online wagering.

But new poker and slot apps available on mobile devices are not considered gambling because they don’t allow players to directly wager or win real cash.

Known collectively as “social casino games”, they simulate real life wagering and keep users playing, sharing, and using real money to purchase in-game currency, extra credits, expansions and gifts.

Much like other social games including Candy Crush, Words with Friends or Angry Birds, these games increase their reach via the user’s own social networks, as they constantly ask the player to invite their contacts to play.

When signing in, players are asked to accept Terms and Conditions that allow for this form of promotion. The sign-in page of the slots app House of Fun, for example, says: “This app may post on your behalf, including your high scores, games you played and more”.

Even though there is no conclusive evidence that social casino apps lead to gambling addiction, they do aid in the cultural normalisation of gambling.

DoubleDown Casino, Slotomania, Zynga Poker, Betting Billionaire and MyVegas are but a few of a myriad of gambling-like apps on Facebook that are becoming increasingly popular. Slotomania was the most downloaded app on the iTunes Store in 2012.

And industry reports reveal that the worldwide social gambling market far exceeds real money online gambling with 170 million users per month versus 50 million users per month.

But there is still a mammoth discrepancy in terms of revenue: social gambling generates $2 billion per month, while online gambling produces $36 billion.

Perth’s newest casino

 

Chumba World was developed in Australia, and uses a sweepstakes model to circumvent US regulations on online gambling. Virtual Gaming Worlds

 

Although in the strictest sense it is not yet possible to gamble through these apps, some developers are finding ways to monetise gambling-like play. Virtual Gaming Worlds, a start-up based in Perth that operates the largely popular Facebook app Chumba Casino, bases its business model on sweepstakes.

This strategy profits from a loophole in Facebook’s policies, as some jurisdictions, such as the United States, don’t consider sweepstakes to be gambling. This loophole could be an entry into the Australian market if regulations loosen up.

And there seems to be a move towards real-life benefits derived from wins in virtual gambling. This pushes the limits of gaming further into the realm of real money wagering.

The Facebook slot app myVegas, developed by PlayStudios for the MGM Grand – one of the biggest casinos in Las Vegas – allows players to cash-in their winnings in selected establishments for prizes that range from free meals to tickets for shows or swimming with dolphins.

Some of the slots available in myVegas are extensions of the casino’s branding strategies, with titles such as New York New York, Excalibur and Mirage. These use cartoonish designs that echo popular social gaming titles like Farmville and constantly invite you to add your Facebook friends to the player roster.

Other gambling-themed apps present inspirational narratives of personal achievement while interacting with the real world. Betting Billionaire promises a “chance to live the millionaire lifestyle you always dreamed of and try to become a Billionaire”.

Players achieves this by using “your knowledge of sporting events to bet big on Football, Tennis, Horse Racing, Basketball and more” and competing “against your friends to see who knows their stuff”. In the gameplay you can “Spend your winnings on the latest bling from cool cars to luxury homes”.

Like Chumba Casino, Betting Billionaire could very well benefit from the loopholes in Facebook’s policies concerning sweepstakes and profit from a large pool of would-be-gamblers.

The popularity of these apps has cultural and ethical implications in a country like Australia with a high incidence of problem gambling. And these are evident in the merging of the gambling and gaming industries.

The consolidation of the social casino industry has involved key industry players such as slot machine manufacturer IGT, which bought Double Down Interactive; WMS, which launched Lucky Cruise Social Casino, a social casino that operates on Facebook; and pokie machine giant Aristocrat, which acquired Product Madness, a top five operator of slot games on Facebook, with more than 500,000 daily active users.

Social responsibility: coming soon

The perceived risks of social casino games have raised concerns about public welfare.

Just a few days ago the South Australian premier Jay Weatherill called for new regulations on social casino products, seeking the cooperation of Apple to make it illegal to supply social gambling apps to minors. Other politicians, including senator Nick Xenophon, share the notion that social casino apps are breeding new problem gamblers.

Will Facebook become a theme park of risk? Given recent developments it is certainly a real possibility.

César Albarrán Torres does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

Forge shares fall after debt rescue

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Shares in engineer and constructor Forge Group have plunged by more than 80 per cent as it revealed it had to be rescued from disaster by creditors ANZ Bank.

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Shareholders jumped at the chance to dump the stock on Thursday after the company came out of a four week trading halt.

Perth based Forge Group was facing a cashflow crisis as it sought to repay debt and provide $45 million needed before the end of December to finish building two poorly performing power stations.

ANZ agreed to increase a debt facility with Forge from $11 million to $60 million, as well as waive covenants and nearly $10 million in repayments for the next nine months.

However the bank now has warrant options over 13 per cent of Forge’s issued shares, which if exercised could dilute other shares and profits.

Forge’s shares lost $3.495, or 83.6 per cent, to 68.5 cents, having earlier fallen to 28.5 cents.

The plunge wiped more than $300 million off its market value, to $59 million.

Forge gave no indication of its problems on August 29 when it forecast continued success in the 2013/14 financial year after a $63 million net profit in 2012/13.

However on Thursday it said it expected to post an earnings loss of $85 million to $90 million in 2013/14, following a $127 million profit writedown.

Poorly performing gas turbine power stations at Mt Isa in Queensland and Rio Tinto’s West Angelas power station in Western Australia are the source of the writedowns.

Forge chairman David Craig said the scale of underperformance of the two power stations had only come to light in a short space of time, which was unacceptable to the board.

Chief executive David Simpson described the outcome as regrettable and extremely disappointing, citing poor project management among a range of cost blow-out problems.

Leadership changes have been made at both power stations, with Mr Simpson to have direct oversight of both projects until their expected completion next year.

CMC Markets chief market strategist Michael McCarthy said Forge’s problems with debt were reflective of challenges being faced by the wider mining services sector.

Slowdowns in mining activity would also affect gas demand and therefore revenue from Forge Group’s power stations, he said.

However Mr Simpson pointed to the company’s contracted order book of more than $1.8 billion as reason to remain confident on its future prospects.

Job ad numbers improving says SEEK

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Jobs website SEEK says it has experienced a slight increase in advertisements in the past few months, which could see it deliver a stronger than expected earnings result this financial year.

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SEEK had been experiencing a flat to gentle decline in the number of job ads posted on its websites each month leading up to the end of June 2013.

But chief executive Andrew Bassat said the company had recorded an improvement in recent months.

“Based on the first four months of the financial year, we are observing improving trends with flat to gentle increases in ad volumes on a month-on-month basis,” he said.

That’s good news for job seekers, with the unemployment rate currently sitting at 5.7 per cent and many economists expecting it to push above six per cent next year.

Mr Bassat said a continued improvement in job ads could lead the company to upgrade its earnings forecast for the 2013/14 financial year.

The company had previously forecast growth on its 2012/13 revenue, earnings and underlying profit, which was $141 million.

SEEK shares gained 73 cents, or 5.9 per cent, to $13.13.

Meanwhile, SEEK also announced plans to float its international student recruitment business IDP Education in 2014.

The recruitment business is 50 per cent owned by SEEK, with the rest of the ownership spread across 38 Australian universities.

IDP chief executive Andrew Thompson said an initial public offering (IPO) would set the business up for future growth.

“The IPO will provide a more flexible capital structure for future growth and provide IDP shareholders an opportunity to realise a portion of their investment in the company.”

Rivers asked women’s label to buy it out

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The boss of the family owned Rivers clothing brand called Australia’s biggest women’s fashion retailer asking to be bought out.

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The 28-year-old Rivers shoe and apparel brand has been sold for $5 million to Specialty Fashion Group, which has the Katies label in its portfolio.

Specialty’s chief executive Gary Perlstein said Rivers’ sole director Philip Goodman’s advisers called his company offering to sell the business.

“It’s one of those rare and fortunate circumstances where there was a motivated seller,” he told AAP.

“We got a phone call and as a result we were able to achieve what we think is a very good value acquisition price.”

Mr Perlstein said Rivers was not sold cheaply because of debt problems.

“In a transaction … you negotiate hard, you extract the value you believe is appropriate,” he said.

Specialty Fashion Group says it plans to expand the number of Rivers Australian stores from 160 to 220.

The news saw Specialty shares gain four cents, or 5.1 per cent, to 83 cents.

Specialty will invest $4 million into the Rivers business by the 2014/15 financial year to improve its performance.

Rivers is not expected to make a contribution to Specialty’s earnings until that time.

Specialty has a customer database of seven million while Rivers has an estimated base of several hundred thousand.

The fashion group says it will achieve significant costs savings of $10 million on an annualised basis by fiscal 2015, which Mr Perlstein said would occur in the logistics area.

“That’s by leveraging volume around the country,” he said.

Rivers revenue for fiscal 2014 is estimated at $180 million.

Earlier this year, Rivers signed an accord after it was revealed to have used Bangladeshi sweat shop labour to make garments in unsafe and intimidating conditions.

Specialty Fashion Group had also signed an accord on labour standards in Bangladesh, which ensures internal audits are conducted.

“That will give us the comfort that we need that we apply to our business,” Mr Perlstein said.