MARKET CLOSE: NZ stocks rise as earnings spur risk appetite; NZ Oil & Gas rises, F&P Appliances falls
By Jason Krupp
Aug. 25 (BusinessDesk) - New Zealand stocks rose for a second session, with the positive tone of local earnings buoying investor appetite for higher yielding, or riskier, assets. New Zealand Oil & Gas Ltd. led gainers, and Fisher & Paykel fell.
The NZX 50 Index rose 14.05 points, or 0.4%, to 3,301.57. Within the index, 20 stocks rose, 16 fell, and 14 were unchanged. Turnover was $96.4 million.
NZ Oil & Gas, the energy exploration and production company, rose 8.1% to 67 cents after the company yesterday said it was pressing ahead with plans to drill exploration wells offshore Taranaki, despite taking charges of $98.8 million for its investment in the failed Pike River Coal mine and reporting a net loss for the year to June 30 of $75.9 million.
"The share price looks relatively undervalued compared to the assets that they own," said Guy Elliffe, head of equities at AMP Capital Investors. "The market also seems a little confused by a result that didn't have any surprises in it."
PGG Wrightson Ltd., the rural services firm selling its finance units to Heartland New Zealand Ltd. for $100 million, rose 4.4% to 47 cents. Heartland, the would-be bank, rose 1.9% to 54 cents.
Contact Energy Ltd., the country's third biggest listed company, rose 2.3% to $5.31.
Skellerup Holdings, the rubber goods and milking equipment manufacturer, rose 1.6% to $1.24 after it reported a net profit of $20.2 million for the 12 months ending June 30, up from $11.9 million in the previous year. Revenue rose 7.1% to $193.6 million in the period. The company said it was targeting a net profit of between $22 million and $23 million in the 2012/13 financial year.
"The distinctive thing of result was that they gave guidance which is unusual in this market, and shows they have a fair degree of visibility across their business," Elliffe said.
Winemaker Delegat's Group was unchanged at $2 after it lifted underlying annual net profit before adjustments by 10% to $23.9 million for the year ended June 30. That was on the back of a 5% increase to sales to $229.8 million.
The company however forecast a massive drop in British and European sales in the coming financial year which won’t be fully offset by increased sales elsewhere and higher case prices.
Whiteware manufacturer F&P Appliances fell 6.7% to 48.5 cents, leading decliners on the exchange after it slashed earnings expectations to between $10 million and $20 million in the current financial year due to the meteoric rise of the Australian dollar against the greenback.
That result compares with a $33.5 million for the financial year ending 31 March 2011, itself a turnaround from the company’s $83.3 million loss the previous year.
Campervan rental company Tourism Holdings fell 4.8% to 60 cents after it posted a full-year loss after writing down goodwill on its rentals business in Australia and New Zealand. Sales rose 7% on the contribution from its Road Bear unit in the U.S. and increased fleet sales.
The loss was $27.3 million in the 12 months ended June 30, including $26 million in impairments, from a profit of $4.6 million a year earlier. Operating revenue climbed to $195.8 million from $182 million.
Pumpkin Patch Ltd., the children's clothing chain, fell 4.2% to 91 cents. NZX Ltd., the securities market operator, fell 2.3% to $2.13.
Air New Zealand, the national carrier, rose 0.9% to $1.12. The airline today posted a second-half loss as earthquakes in Canterbury and Japan disrupted services and led to unprofitable 'compassionate' fares for Christchurch residents.
The loss was $37 million in the six months ended June 30. In the full year, earnings before changes in the value of hedging contracts fell 11 percent to $82 million as sales climbed 7 percent to $4.34 billion.