MARKET CLOSE: NZ stocks rise on earnings strength

MARKET CLOSE: NZ stocks rise as corporate earnings shrug off reporting gloom

By Jason Krupp

Aug 26 (BusinessDesk) – New Zealand stocks rose for the third time in four sessions, as a spate of better than expected corporate earnings lifted the market into positive territory. Nuplex Industries Ltd. led gains on the bourse, surging to a three-month high, after posting earnings that beat its guidance and lifting its dividend.

The NZX rose 12.2 points, or 0.4%, to 3018.2. Within the index, 20 stocks rose, 20 fell and 10 were unchanged. Turnover was $87.7 million.

“The market has done pretty well today with a pretty stunning performance from New Zealand companies,” said Shane Solly, a portfolio manager at Mint Asset Management. “What was also notable was the outlook from companies, many of which were guardedly positive, but positive nonetheless.”

Nuplex, the specialty chemicals maker, rose 6.8% to $3.15 after it posted a record profit of $64.2 million, up from $16.7 million a year earlier on the back of a recovery in its Asian and European markets. The company will pay a final dividend of 11 cents a share, up from 5 cents a year earlier.

Air New Zealand Ltd., the national carrier, rose 4.1% to $1.26. The company earlier announced earnings before tax of $137 million for the year to June 30, broadly in line with expectations. The results were down 6% on the previous period, as the lingering effects of the global recession continued to put pressure on demand.

Auckland International Airport Ltd., the nation’s busiest gateway, rose 1% to $1.99, after underlying profit came in ahead of its initial guidance, at $105.05 million. Revenue was down 1.4% to $363.1 million over the year. The decline was less severe than initially expected given the soft operating environment and the anticipated impact from the reversion to a dual duty free operator model.

Guinness Peat Group Plc, the investment company, rose 1.6% to 65 cents after the company posted its half-year results today, showed a return to profit of 12 million British pounds, from a year-earlier loss of 24 million pounds. GPG chairman Ron Brierley said the company will also close its New Zealand office, saying the nation where cut his teeth as a corporate raider holds “little or no opportunities” for the investment company.

Telecom Corp., which is fighting to get a share of the government’s $1.35 billion fund to roll-out high-speed internet, rose 1.5% to $2.02 after the Commerce Commission voiced its opinion on wholesale broadband services, business data services and bundled resale services, saying they shouldn’t be legislated. The move, if accepted, will allow New Zealand’s largest telephone company to set the terms for its resale services.

Tourism Holdings Ltd., the campervan rental company, rose 2.6 to 77 cents after it announced a 59% lift in net profit to $4.6 million as a turnaround strategy launched 18 months ago started to pay off. Net debt dropped 37% to $37 million in what chairman Keith Smith said was a company demonstrating positive momentum, but requiring a higher return on the business’s capital investment.

Ebos Group, the medical supplies distributor, rose 2.2% to $6.75 after the company reported an 18% jump in net profit to $23.4 million in the year to June 30. EBOS reported only a moderate lift in total revenues to $1.37 million, compared with $1.34 million, but a strong lift in net profit after tax from $19.7 million a year earlier.

Cavotec MSL Holdings, the global engineering group and owner of Christchurch-based MoorMaster, was unchanged at $2.45. The company posted a 3.5% increase in first-half earnings and said it looks set to return to 2008 profit levels as its markets recover.

Kathmandu Holdings, the outdoor retail, fell 4.2% to $1.58, pacing declines on the NZX 50. Fisher & Paykel Appliances Holdings, the whiteware maker, fell 3.8% to 51 cents, and Australian media company APN News & Media Ltd. fell 2.5% to $2.33.

Pyne Gould Corp., the financial services company which is trying to merge its finance unit with two rivals to set up a listed bank, fell 2.3% to 42 cents. The company reported net profit of $22 million, or 4 cents a share, in the 12 months ended June 30, compared to a loss of $54.4 million, or 55 cents a year earlier. The company also announced that its wealth management businesses, Perpetual Group, won’t automatically go into the proposed merger.

Hellaby Holdings, the investment firm, fell 0.6% to $1.85 after it posted a full-year net profit of $10.3 million, compared to $707,000 a year earlier. Revenue dropped 4.8% to $454.2 million amid soft consumer demand. The investment firm cut its total net debt 29% to $73.3 million, and is asking shareholders to inject some $28.4 million in a three-for-seven pro-rata renounceable rights issue at $1.30 a share.

New Zealand Windfarms Ltd., the operator of a windfarm in the Manawatu, after the company posted a full-year loss of $7.6 million while saying it expects a return to profit in the current year. Excluding one-time charges, the loss was $533,000, exceeding the forecast loss of $435,000 in its April prospectus.

(BusinessDesk)

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