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MARKET CLOSE: NZ stocks fall as fears sap results optimism

MARKET CLOSE: NZ stocks fall as fears sap results optimism; F&P Healthcare falls, NZ Refining gains

By Jason Krupp

Aug. 23 (BusinessDesk) - New Zealand stocks fell after a weaker tone on global equity markets sapped early momentum, with Fisher & Paykel Healthcare Corp. leading decliners on the exchange. New Zealand Refining Co. rose.

The NZX 50 Index rose 4.85 points, or 0.2%, to 3,269.58. Within the index, 19 stocks fell, 19 rose, and 12 were unchanged. Turnover was $102.5 million. Today's decline still leaves the exchange well off the Aug. 9 low of 3,055.09 it hit in the wake of the U.S. credit rating downgrade, although the index has yet to recover all the ground it lost.

"The market is moving around on very thin volumes, and local results to date have been within the range of expectations," said Shane Solly, portfolio manager at Mint Asset Management. "However the tone of the market is still very dependent on the international direction which is still very hazy at the moment, and there's still a lot to worry about."

F&P Healthcare, the manufacturer of breathing masks and respirators, fell 3% to $2.29, with the stock giving up some of the gains seen after it announced last week it will start targeting sales in other currencies to protect its revenues from the weaker U.S. dollar.

Cavalier Corp., the listed carpet maker, fell 2.9% to $3.40, with the legal challenge to its wool scouring monopoly currently taking place in the High Court in Wellington weighing on the stock.

Rival Godfrey Hirst is challenging the Commerce Commission's decision to allow subsidiary Cavalier Wool Holdings to buy the wool scouring assets of NZ Wool Partners International Ltd., a move that would give it outright control of the scouring market in New Zealand. CWH is jointly owned by Cavalier, Accident Compensation Corp., and private equity investor Direct Capital Investments.

Restaurant Brands NZ Ltd., the fast food franchise operator, fell 2.6% to $2.26. Hallenstein Glasson Holdings, the High Street fashion retailer, fell 2.3% to $3.37.

PGG Wrightson Ltd., the rural services company looking to sell its finance unit to Heartland New Zealand Ltd., fell 2.2% to 45 cents.

Telecom Corp., the country's biggest phone company, fell 1.8% to $2.69. Rating agency Standard & Poor’s kept the phone company’s long-term rating at ‘A’ and its short-term rating at A-1, affirming its creditwatch with negative implications, and said the proposed demerger will weaken Telecom’s “strong business profile.”

Cavotec MSL Holdings, the global engineering firm, fell 1.8% to $2.70. The company today reported a 48% rise in first-half profit before foreign exchange and fair value adjustments, reflecting a strong overall performance from its four industry groups.

Adjusted profit rose to 4.1 million euros in the six months ended June 30 from 2.8 million euros in the same six months last year. After foreign exchange and fair value adjustments, the result fell to 1.4 million euros from 7.7 million euros.

Nuplex Industries Ltd. fell 1.6% to $2.49. The industrial chemicals and resins manufacturer yesterday posted a 3.6% increase in full-year profit, beating its own guidance.

New Zealand Refining Co., which operates the country's only oil refinery, led gainers on the exchange, with the stock gaining 6.3% to $3.40 on the back of yesterday's stronger half-year earnings report. NZR's net profit rose 7.5% to $31.2 million for the six months ended June 30 due to a 16.9% increase in half-year revenue to $157.9 million.

Tower Ltd., the general insurer controlled by Guinness Peat Group, rose 4.3% to $1.47.

Vital Healthcare Property Trust, the specialist investor in medical clinic properties, rose 2.8% to $1.11, after lifting its distributable profit 50% to $18.2 million.

Contact Energy Ltd. rose 1.2% to $5.21. The country's biggest listed electricity company yesterday beat market expectations and reported flat underlying earnings after tax of $150.9 million for the 12 months ended June 30, up from $149.8 million last year. EBITDAF was $441.4 million, up 3% from the previous financial year.

Auckland International Airport Ltd., the national carrier, rose 0.5% to $2.225 after it posted a 15% gain in underlying profit, driven by a jump in earnings from retailing at its new departures area and increased airfield income.

Profit excluding revaluations and other one-time items rose to $120.9 million compared to $105 million a year earlier, with sales up 9.6% to $397.7 million. Underlying profit matched the forecast of Forsyth Barr analyst Jeremy Simpson.

Metlifecare, the retirement village operator, was unchanged at $1.95 after it reported a 69% fall in full-year profit after booking strong gains in its portfolio a year ago bolstered its 2010 figure.

Net profit was $20.8 million in the 12 months ended June 30, down from $67.5 million a year ago. The slump in bottom line profit came as it booked a $27.5 million gain in the unrealised value of its investment properties, compared to a $73.2 million gain a year earlier.


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