Stocks to watch: Wrightson, Sky City, Fletcher, Telecom

Monday 31st August 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading Friday.

Themes of the day: Stocks on Wall Street mainly weakened on Friday after the Reuters/University of Michigan Surveys of Consumers showed confidence fell to a four-month low. The National Bank Business outlook is released today. The kiwi dollar held at around 68.50 US cents.

Allied Farmers (ALF): The shares tumbled 18% to 28 cents on Friday after the group posted a full-year loss of $33.3 million, from a profit of $2.4 million a year earlier, reflecting non-cash items such as a $20.5 million write-down of its investment in subsidiary Allied Nationwide Finance.

Broadway Industries (BWY): The owner of the Mercer stainless steel business posted a full-year loss of $2.6 million, including a loss of $987,000 from discontinued operations. Revenue from continuing activities fell 2.2% to $35.7 million. The shares trade infrequently and were last at 30 cents on August 13.

Fletcher Building (FBU): New Zealand’s biggest construction company gained 2.3% to $8.02 on Friday, the first close above $8 since May 1998. Government figures last week showed home-building consents climbed 5% in July after slumping 9.6% in June, stoking optimism for a revival in residential construction.

Guinness Peat Group (GPG): The investment group posted a first-half loss of 22 million pounds, from a year-earlier loss of 42 million pounds. The loss reflected difficult market conditions at its Coats thread-making business. Chairman Ron Brierley said there is unlikely to be an improvement in the full calendar year. The shares were unchanged at 80 cents on Friday.

Investment Research Group (IRG): The investment advisory and brokerage group on Friday lodged its annual report. Managing director Brent King said that after a review of the carrying value of assets IRG took a provision of $1.1 million against an investment asset, reduced the carrying value of a tax asset by $135,000 and amortised its customer databases, slicing $211,000 off profit. The stock last traded at 2.8 cents on August 10.

Northland Port (NTH): The port and property company reported on Friday that full-year profit tumbled to $2.69 million, from $10 million a year earlier, when it got a $7.6 million gain from the sale of a half-stake in the marina development Marsden Cover. The company cut its final dividend to 3 cents from 5 cents. The shares last traded at $1.85 on August 27 and have declined about 32% this year.

PGG Wrightson (PGW): The declining shares of Wrightson and 20% owner Pyne Gould Corp. (PGC) could make them attractrive to an investor seeking to hoover up shares cheaply, the Sunday Star-Times reported yesterday. The newspaper quoted an unnamed ‘market source’ saying the companies have wiped $250 million off their market valuation, making it easier for an investors to gain shares in a deeply discounted capital raising. Pyne Gould jumped 11% to $1.14 on Friday while Wrightson fell 7.6% to 73 cents.

Rubicon (RBC): The bio-research group with a focus on forestry reported a full-year loss of US$2 million, from a loss of US$1 million a year earlier. Revenue fell to US$322 million from US$377 million. The shares traded unchanged on Friday at 90 cents.

Sky City Entertainment Group (SKC): The shares were lowered to ‘neutral’ from ‘outperform’ by Rob Bode, an analyst at First NZ Capital, according to the ShareChat website. The casino and hotel group needs a turnaround in the performance of its gaming machines in Auckland to achieve sustained revenue and earnings growth, he said. The shares rose 0.9% to $3.31 on Friday and have climbed almost 18% in the past three months.

Telecom Corp. (TEL): The Commerce Commission today said it will begin an investigation into an alleged breach of the Separation Undertakings of Telecom’s wholesale unit. The regulator has yet to decide whether to act on a complaint about Telecom’s loyalty offers. The shares rose 8 cents to $2.79 on Friday.

Businesswire.co.nz

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