Stocks to watch: New Zealand equity preview

Thursday 20th November 2008

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

Themes of the day: Shares on Wall Street dropped, sending the Standard & Poor’s 500 Index to a five-year low. General Motors 14% on concerned a government aid package to automakers may be delayed. Consumer prices in the US had a record plunge. In New Zealand, Hanover announced its debt restructuring plan and Fisher & Paykel Healthcare posted a 51% increase in first-half profit.

Connexionz (CNZ): The NZAX-listed developer of real-time vehicle tracking systems named Roger Carruthers as chief executive, replacing Richard Riley, a director who held the post on a part-time basis. Carruthers had a 23-year career at Merck Sharp & Dohme. The shares last traded on October 24 at 15 cents and are little changed this year.

Fisher & Paykel Healthcare (FPH): The manufacturer of medical equipment such a breathing devices said first-half profit rose 51% to $28 million as it lifted sales by 24% and benefited from a weaker New Zealand dollar. The company said it anticipates continued strong sales growth through the rest of the 2009 financial year and for the New Zealand dollar to average 55 US cents, putting the company on track for a $60 million full-year profit. The stock was at $3.12 yesterday and has gained 6% in the past three months.

People Telecom (PEO): The company is “is EBITDA positive and positioned for profitable growth throughout 2008-09,” chief executive John Stanton told shareholders at their annual meeting yesterday. The company has an “improved and expanded product suite” with sustainable margins and has exited unprofitable businesses, he said. The stock trades infrequently and changed hands at 12 cents on June 8.

Postie Plus Group (PPG): Chairman Peter van Rij said in the annual report that he expects the retailer “to come into its own with a performance in 2008-09 that will see us deliver a modest profit to shareholders.” The company posted an 8.5% drop in first-quarter sales though it said margins are improving. The stocks last traded at 32 cents on November 18 and is down more than 55% this year.

Pumpkin Patch (PPL): The children’s clothing chain fell 4.3% to 90 cents yesterday, 28% below the company’s 2004 IPO price and bringing its two-day slide to about 35% after chief executive Maurice Prendergast said 2009 earnings would weaken after an “extremely difficult” first quarter.

Rakon (RAK): The maker of components for navigation systems has tumbled more than 40% since November 14, when the company announced a 38% slump in profit and forecasting a weaker outlook. The stock dropped 1.9% to $1.02 yesterday.

Taylors Group (TAY): Chairman Geoff Ricketts told shareholders at their annual meeting yesterday that the company expects “a meaningful improvement in earnings before interest and tax” in 2009 as it keeps control of production hours and labour. The stock was unchanged at $1.15 yesterday and has dropped 32% this year, matching the NZX 50 Index.

By Jonathan Underhill

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