MARKET CLOSE: NZ shares rise; GPG, PPL gain

MARKET CLOSE: NZ shares rise; GPG gains on Coats, PPL up before earnings

March 1 (BusinessWire) – New Zealand shares rose for a fourth day as investment group Guinness Peat Group reported an improved performance from its Coats unit and said a “value return” to shareholders was top priority. Pumpkin Patch, the children’s clothing chain, climbed ahead of its results tomorrow.

The NZX 50 Index rose 8.05, or 0.3%, to 3164.152. Within the index, 20 stocks rose, 16 fell and 14 were unchanged. Turnover was a lower-than-average $46 million.

Guinness Peat jumped 6.1% to 87 cents after saying a “value return,” which it hasn’t defined, is top priority and will be announced in the next two months, having being deferred during the global financial crisis. While Coats, its biggest investment, had a loss of 3 million pounds, this reflected timing of tax and the threadmaker’s “strong” cash flow enabled it to repay debt.

“Coats does look pretty encouraging, especially from a cash-flow business going forward,” said Paul Richardson, chief investment officer at BT Funds Management, which oversees $2.1 billion. On the value return, “we don’t see any major restructuring of the business” and it could be “quite some time before we see some value coming out.”

Pumpkin Patch gained 2.6% to $2. The retailer may report a 43% jump in reported profit to $13.6 million when it releases its first-half results tomorrow, according to Guy Hallwright, an analyst at Forsyth Barr. While Pumpkin Patch probably had a reasonable Christmas, U.K. trading may have been hampered by bad weather.

Vector Ltd., the nation’s largest power and gas pipeline company, rose 2.1% to $1.98. The utility on Friday reported an 11.6% gain in first-half profit to $101.3 million after reducing debt, lowering expenses and its network revenues showed resilience to recessionary conditions.

Delegat’s Group tumbled 7.5% to $2.10, adding to a 14% slide on Friday when the producer of Oyster Bay wines forecast a 30%-to-40% cut in full-year earnings as it prepares to write down the value of vineyards and their "biological assets" as wine industry oversupply sinks grape prices.

NZX Ltd., which regulates and operates the stock exchange, slipped 0.5% to $2.04 after reporting full-year earnings that were weaker than it achieved in the first half, after recognising a drop in the value of the Markit shares it got for the sale of its TZ1 carbon registry. Annual profit jumped to $38.7 million from $10.2 million a year earlier. In the first half it earned $60.8 million.

Telecom Corp. dropped 6% to $2.19 and Telstra Corp. fell 7.7% to $3.82, the biggest decliners on the index today. Both phone companies posted weaker earnings and Telecom has said full-year profit will be at the low end of its range, reflecting breakdowns on its XT network and a weak economy.

Australia & New Zealand Banking Group rose 2.9% to $30.10 and Westpac Banking Corp. rose 2.7% to $33.90, matching advances on the ASX.

AMP NZ Office Trust fell 1.3% to 76 cents. The property investor on Friday bowed to shareholder pressure and said it will restructure by mid-year as a normal company with its own board and a new management fee structure to clearly separate the interests of the trust and its manager, AMP Haumi Management Ltd.

Air New Zealand rose 1.6% to $1.31. The state-owned national carrier on Friday reported first-half profit almost doubled as fuel costs tumbled and the airline reined in labour costs.

(BusinessWire)