MARKET CLOSE: NZ shares fall; Cavalier plunges

MARKET CLOSE: NZ shares fall; Cavalier plunges on profit warning, Sky City falls

Feb. 15 (BusinessDesk) – New Zealand shares fell after carpet maker Cavalier issued a profit warning, sending its shares down by almost a fifth and stoking concern other companies tied to construction, such as Fletcher Building, may be hurting.

The NZX 50 Index fell 36.458 points, or 1.1 percent, to 3293.87, the lowest level since Jan. 26. Within the index, 28 stocks fell, 13 rose and nine were unchanged. Turnover was $123 million, marking it as one of the busiest days this year.

Cavalier shed 17.4 percent to $1.90, matching the 2 ½-year low reached on Dec. 29.

The company said today it was “extremely unlikely” to meet its full-year profit guidance of $8.5 million to $10.5 million. First-half earnings tumbled 59 percent.

"It is a good business and it is well run and if they are finding it tough other businesses will be finding it even tougher," said Shane Solly, portfolio manager at Mint Asset Management. “Fletcher building is down slightly and this could be in sympathy."

Fletcher, the biggest company on the bourse, dropped 2.7 percent to $6.53.

Sky City Entertainment Group, the casino and hotel operator, fell 1.4 percent to $3.59, even after posting a 17 percent jump in first-half profit on a recovery in Auckland gaming, which gave it the confidence to forecast full-year earnings at the top end of its guidance.

"Sky City is a good result," Solly said.

AMP NZ Office Trust rose 0.6 percent to 88 cents after announcing that first-half net profit fell 28 percent to $20.4 million as rental income fell due to the sale of a building and the departure of major tenants.

Mainfreight fell 2.1 percent to $9.20, extending its decline yesterday when the company released quarterly results that disappointed some analysts.

Hallenstein Glasson Holdings, the clothing chain, rose 1.6 percent to $3.76, the only gainer among retailers after government figures showed the volume of retail spending jumped 2.2 percent in the final quarter of 2011, almost three times the 0.8 percent pace forecast in a Reuters survey of economists.

Warehouse Group dropped 4.2 percent to $2.50 and Briscoe Group dropped 3.3 percent to $1.45.

Steel & Tube Holdings, which sells steel building products, climbed 2.4 percent to $2.15, the biggest gainer on the NZX 50. Tapware manufacturer Methven rose about 2 percent to $1.04.

Telecom fell 1.6 percent to $2.14.

(BusinessDesk)

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