MARKET CLOSE: NZ stocks fall; Contact, Telecom pace decliners, Wrightson rises
By Jason Krupp
Dec. 20 (BusinessDesk) - New Zealand stocks fell, paced by Contact Energy Ltd. after the utility reported it had shed more customers. PGG Wrightson Ltd. paced gainers on the exchange rebounding after being heavily sold last week.
The NZX 50 Index fell 25.15 points, or 0.8%, to 3,299.95. Within the index, 15 stocks declined, 17 gained and 18 were unchanged. Turnover was $72.4 million.
Contact, which competes with government-owned power companies, fell 1.6% to $6.14 after the biggest utility on the NZX 50 said it lost a further 3,000 customer losses in its latest monthly operating statistics, with total electricity numbers falling 2,500 over the month to 467,000, and gas customers falling by 500 t0 62,000.
"It shouldn't come as too much as a surprise, with the heavy marketing being done by the state-owned energy companies," said Grant Williamson, a director at Hamilton Hindin Greene. "I wouldn't think they're too worried when they’re making money on the spot price and their big customers."
Telecom, the country's biggest telephone company, fell 0.9% to $2.21 after a Commerce Commission report found broadband speeds are 20% faster when accessed through unbundled local loop services than through Telecom’s regular wholesale offering.
Pumpkin Patch Ltd., the children's clothing retailer, fell 2.5% to $1.59, pacing decliner on the bourse. Rakon Ltd., the maker of crystal oscillators used in cellphones and GPS units, fell 2.4% to $1.20, New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 2.3% to 84 cents, and Fisher & Paykel Appliances Holdings, the whiteware manufacturer, fell 1.9% to 51 cents.
Comvita fell 6.3% to $1.50 after the Patents Country Court in the U.K. dealt the medical honey products developer a double blow after it ruled against the company in an infringement case and declared its wounds treatment patent invalid.
Comvita has been fighting an intellectual property infringement battled against Brightwake, which markets a honey-based wound care product in the U.K. that the company says violates a well-established patent granted in the U.K., U.S., New Zealand and Australia. Comvita has spent $2 million so far defending the patent.
Wrightson, the rural services group, rose 6.8% to 47 cents, recouping some of the ground it lost last week when it revised its earnings forecast downwards. Full year net profit is expected to come in between $15 million and $18 million, compared with $23 million earned previously.
Fletcher Building Ltd., the country's biggest construction company, was unchanged at $7.73 after takeover target Crane Group urged shareholders to reject the company's hostile bid, saying the offer was “inadequate and undervalues the company.” Fletcher has offer A$9.35 a share offer made up of A$3.43 cash and one Fletcher share.
Separately, Fletcher announced reached an out-of-court settlement with Cerberus Capital Management LP over $50 million of milestone payments stemming from the 2007 purchase of the Formica laminated board business.
Michael Hill international Ltd., the jewellery manufacturer and wholesaler, rose 2.4% to 87 cents after family of the company's founder renewed its attempt to take control of the chain, offering a 6% premium to take its holding to 50.2% from 47.6%.
Durante Holdings, an Australian incorporated company set up to acquire the shares of the Hill family's trusts, plans to offer 90 cents a share for 5% of Michael Hill.
"If too many shareholders look to accept there will be heavy scaling which is why price hasn't reach the offer," Williamson said. "Overall this shows the level of confidence the family has in the company."
Air New Zealand Ltd. rose 1.4% to $1.49 after the national carrier reported an 11% gain in passenger volumes last month from a year earlier, suggesting demand is returning to levels before the global financial crisis.
Metlifecare was unchanged at $2.25 after the company agreed to sell its Merivale Retirement Village in Christchurch to a group of private South Island investors for $26 million, using the proceeds to repay debt.
The sale will leave the company with just one South Island retirement village, Oakwoods, in the Nelson suburb of Richmond.