Stocks to watch: The Fisher & Paykels, NZ Farming Systems

Monday 25th May 2009

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

Themes of the day: The U.S. announced it would introduce subsidies for its dairy farmers. Finance Minister Bill English is due to deliver his budget this week, which is likely to herald widening budget deficits and a tight rein on spending. The two Fisher & Paykel companies are scheduled to announce earnings this week. F&P Appliances had it stock halted pending completion of refinancing talks. Shares on Wall Street extended their slide for a fourth day on Friday in New York as banks dipped, earth-moving equipment maker Caterpillar fell and General Motors tumbled.

Fisher & Paykel Appliances (NZX: FPA ): The second-worst performer on the NZX 50 after Nuplex Industries this year may post a full-year net loss of $17 million this week, or earnings before one-time items of $28 million, according to Forsyth Barr analyst Guy Hallwright. Overshadowing the earnings is a potential announcement of plans to raise $150 million to NZ$200 million. “Investors want the company to survive” and will support a placement at the right price, said Rickey Ward, equities manager at Tyndall Investment Management, who predicts a discounted share offer or pro-rata offering. The shares rose 4.8% to 66 cents on Friday. The stock was halted pending the completion of capital management initiatives, the company said today.

Fisher & Paykel Healthcare (NZX: FPH ): The manufacturer of breathing masks and respirators may post a 71% gain in full-year net profit to $60 million tomorrow, Forsyth Barr’s Hallwright said, according to the ShareChat website. Hallwright rates the stock a ‘buy.’ The shares fell 2.5% to $3.10 on Friday and are down 1.6% this year.

Kingfish (NZX: KFL ): The investment group posted a full-year net loss of $30.8 million, reflecting a $32.9 million reduction in the value of its investments, the second annual drop. The past eighteen months “have been challenging for all share market investors as equity market lows were constantly re-tested and the portfolio’s manager, Fisher Funds, said it still believed in the “soundness of our portfolio.” Kingfish stock fell 4.8% to 80 cents on Friday.

Kirkcaldie & Stains (NZX: KRK ): The upscale Wellington department store said it expects a full-year profit similar to last year’s, assuming retail conditions don’t deteriorate. “Positive cash flows have been maintained and the company’s balance sheet remains robust,” chairman Denis Thom said in the interim report. The stock trades infrequently and was last at $2.25 on May 19.

NZ Farming Systems Uruguay (NZX: NZS ): The U.S. announced Dairy Export Incentive Program subsidies for US dairy farmers, a move Fonterra Cooperative called “very disappointing.” Fonterra’s managing director of global trade, Kelvin Wickham, said the announcement is “bad news for the market and bad news for our farmers in New Zealand who compete internationally with no support or subsidies of any type.” It also risked driving prices lower. NZ Farming fell 1.7% to 58 cents on Friday. The U.S. move follows a similar step taken by the E.U.

PGG Wrighton (NZX: PGW ): The nation’s biggest rural services company fell 0.7% to $1.35.

TrustPower (NZX: TPW ): The power company’s stock fell 1.9% to $7.65 after Energy Minister Gerry Brownlee said power prices won’t increase over the next few months as the government decides its response to the a five-year study of the electricity market released yesterday. Separately, chief executive Keith Tempest announced his resignation today.

Businesswire.co.nz

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