MARKET CLOSE: NZ stocks rise; NZX leads gainers, CEN falls

MARKET CLOSE: NZ stocks rise; NZX leads gainers, Contact falls

By Jason Krupp

Feb. 28 (BusinessDesk) - New Zealand stocks rose, with NZX ltd. leading gainers after its diversification into new markets saw full-year pretax earnings jump by almost 20%. Contact Energy Ltd. fell ahead of its yet-to-announced rights issue.

The NZX 50 Index rose 6.6 points, or 0.2%, to 3370.52. Within the index, 23 stocks rose, 17 fell, and 10 were unchanged. Turnover was $112.2 million.

NZX Ltd., the stock exchange operator, rose 5.6% to $1.70, after earnings before interest, tax, depreciation, amortisation and financial instruments for the 12-months to Dec. 31 rose to $20.9 million, from $17.6 million a year earlier.

That was due to the launch of a new clearing house, the widening of its offering to include commodity contracts in New Zealand and Australia, and the acquisition of agricultural media and data businesses.

The diversification has helped make up for the continued decline of listings and securities information. Net income fell to $9.3 million from $38.7 million, reflecting a $31.5 million gain from the sale of TZ1 in the previous period. Sales rose 17% to $50.2 million.

"There is some delivery from those business streams, and while perhaps there is a little way still to go, things are upbeat in terms of listings here in New Zealand," said Shane Solly, portfolio manager for Mint Asset Management.

Skellerup Holdings, the rubber goods and milking equipment maker, rose 4% to $1.29, after it was given clearance to carry with its main activities in Christchurch. The company has two factories and a separate distribution centre situated 3km from the city centre.

PGG Wrightson Ltd., the rural services company, rose 3.9% to 53 cents after Zuellig Group, the owner of local tractor distributor CB Norton Distributers Ltd., emerged as a potential new bidder for a stake in rural services company.

The bid would be the third public expression of interest, after Chinese seed and agricultural research firm Agria Corp.’s $141 million bid to take a majority stake. An unnamed bidder dropped out of the running last week.

Fletcher Building Ltd., the country's biggest construction firm, rose 1.6% to $8.77, which Solly said was probably due to investors drawing conclusions on how much work would need to be done to rebuild Christchurch after the 6.3 magnitude earthquake.

Kathmandu Holdings, the outdoor clothing retailer, was unchanged at $2.09 after it said its Christchurch-based head office and distribution centre are expected to come online within the day following damage inspections, but two of its three stores in the city will remain shut for a number of months.

Contact, the country's third biggest listed company, fell 1.4% to $6.15, leading decliners on the NZX 50. The company looking to raise $623 million to fund its Te Mihi geothermal power plant though a pro rata renounceable rights issue, although no specifics are available yet.

Michael Hill International Ltd., the jewellery retailer, fell 1.1% to 87 cents after Durante Holdings, which represents the founding Hill family, announced that it had successfully acquired a controlling stake in the company. Durante said it had received acceptances from shareholders controlling 12.1 million shares at 60 cents apiece, well above the 10 million shares originally sought, giving it over 50.2% of the company.

Auckland International Airport Ltd., the country's busiest gateway, fell 0.9% to $2.22. Solly said the stock's recent price declines may be due to investors speculating about what impact the Christchurch earthquake will have on international visitor number this year.

Goodman Fielder Ltd., the Australian food ingredient maker, fell 0.6% to $1.68 after it said earnings growth would likely stall in the full year, given uncertain trading conditions and the impact of the floods in Australia and the Christchurch earthquake.

The company today posted a 3.1% gain in first-half profit of A$93.1 million in the six months ended Dec. 31, from A$90.3 million in the previous year. Sales fell 2.2% to A$1.34 billion. The company will pay an interim dividend of 5.25 Australian cents a share, unchanged from a year earlier.

Lyttelton Port Co., which operates the South Island's busiest port, fell 4.6% to $2.10 after it served state-owned coal miner Solid Energy New Zealand Ltd. with a force majeure notice following the Christchurch earthquake. The notice comes after the port operator said the second quake in almost six months added to its damage, but most operations would be up and running within 10 days.

Hellaby Holdings, which has investments in auto-parts, shoes, packaging and construction equipment, fell 2.3% to $2.10.

The company today posted a $5.5 million net profit for the six months ended Dec. 31, up from $2.3 million in the same six months a year earlier which had included a $1.2 million recovery from its ill-fated investment in the BBQ Factory. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 50.9% to $14.6 million. Sales rose just 1.9% to $223.6 million.

Turners & Growers Ltd., the fruit and vegetable exporter controlled by
Guinness Peat Group, fell 0.6% to $1.68 after it posted a 34% drop in full-year profit after a tax expense that wiped out growth in operating earnings.

Net income in the 2010 calendar year fell to $6.3 million, or 4.4 cents a share, from $9.5 million, or 7.62 cents, a year earlier. Sales rose 1.6% to $599 million. The latest results include a building depreciation tax expense of $5.1 million that wasn’t in the year-earlier figures and a $3.4 million write-down in the value of its 50%-owned Inglis Horticulture.

(BusinessDesk)

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