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MARKET CLOSE: NZ shares rise, led by Contact; F&P gains

MARKET CLOSE: NZ shares rise, led by Contact; FPH, MetroGlass advance

By Suze Metherell

May 25 (BusinessDesk) - New Zealand shares rose after Contact Energy said it would return surplus cash to shareholders. Fisher & Paykel Healthcare and Metro Performance Glass gained ahead of reporting their earnings.

The NZX 50 Index rose 18.964 points, or 0.3 percent, to 5794.981. Within the index, 20 stocks rose, 15 fell, and 15 were unchanged. Turnover was $111 million.

Contact jumped 11 percent to $6.18 after the energy generator and retailer said it had ditched plans for now to invest in geothermal schemes offshore and will increase returns to shareholders, including a special dividend of 50 cents per share, payable June 23, and a new ordinary dividend payout ratio of 100 percent of underlying earnings after tax. The stock had dropped as low as $5.50 when Contact first flagged its offshore plans in February.

"Management had let the market down after announcing that they were going to look at offshore geothermal projects with the money they had on the balance sheet," said Robert Garden, investment adviser at Craigs Investment Partners. "That had disappointed shareholders and the stock got sold off pretty heavily. They've done a 180 and announced a 50 cent special dividend today. It's a complete reversal from management, but that has been well received by the market today."

Nuplex Industries fell 1.3 percent to $3.71. The company, which makes resins used in industrial coatings and paint, is forecasting a 64 percent gain in sales in Asia by 2018 as its expansion of plants in China, Vietnam, Thailand and Indonesia bears fruit. The Auckland-based company expects sales from Asia of about US$400 million by the end of 2018, from US$243 million in 2014, according to a presentation for an investor day in Auckland.

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Stocks with a March 31 balance date are reporting earnings to the market, which Garden said had largely been along expectations. Metro Glass, the glass manufacturer, rose 1.7 percent to $1.85. F&P Healthcare, the breathing apparatus manufacturer and exporter, advanced 1.4 percent to $6.39. Both stocks are due to report earnings this week.

Spark New Zealand, formerly Telecom Corp, advanced 0.7 percent to $2.75. Fletcher Building, the construction and building supplies firm, gained 0.4 percent to $8.56.

Outside the benchmark index, Trilogy International rose 7.5 percent to $1. The skincare products and scented candle maker announced its first dividend, paying 3.66 cents per share after annual profit more than tripled to $4.5 million, on Australian sales growth and the first earnings from its Ecoya candle brand.

"They've been searching for profit and growth for a while and shareholders have needed to be reasonably patient to date," Garden said. "When a stock starts paying a dividend it's pretty well received."

Methven rose 0.9 percent to $1.17. The tap and shower manufacturer and exporter lifted annual profit by 21 percent to $5.69 million in line with guidance, after the acquisition of a Chinese manufacturing plant widened margins.

Evolve Education Group advanced 4 percent to $1.04. The childcare operator that listed in December reported a smaller than forecast annual loss as it settled a series of acquisitions faster than anticipated, driving higher revenue. The Auckland-based company reported a net loss of $8.1 million in the period May 20, 2014, to March 31, 2015, smaller than the loss of $9.5 million forecast in its November prospectus.

NPT was unchanged at 65 cents. The listed property investor posted a 16 percent drop in annual profit to $6.4 million reflecting a bigger uplift in the year-earlier period from a revaluation of properties.

(BusinessDesk)

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