Stocks to watch: Contact customers, Cavalier, Skellerup

Friday 24th April 2009

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

Themes of the day: Shares rose on Wall Street after better than expected earnings from EBay, American Express, Apple, Amazon.com and Marriott International. Contact Energy reported a drop in customer numbers. The kiwi dollar edged higher to 56.14 US cents.

Cavalier Corp. (CAV): The maker of wool carpets will face higher prices as prices for carpet-type fleece at a Napier auction rose between 2% and 5%. Almost 11,000 bales were on offer, and around 13,000 will be available at next week’s auction in Christchurch. The company’s stock declined 2.9% to $1.65 in trading yesterday, and have tumbleded over 35% in the past 12 months.

Contact Energy (CEN): The largest-listed power company lost 34,000 customers across its electricity, gas and LPG services, with numbers falling to 609,000 at March 31. The company also generated less electricity in the first quarter as total generation fell to 2236 Gigawatts per hour from 2389 GWH in the same period last year. The stock slipped 1.8% to $5.60 in trading yesterday.

Fisher & Paykel Appliances (FPA): The shares gained 4.6% to 46 cents yesterday, trimming its slide this year to 67%. The manufacturer has a short-term debt facility of $80 million coming due on April 30, driving speculation it will seek fresh capital. Managing director John Bongard yesterday said the company is in talks with lenders and the $80 million “will be repaid from the proceeds of a refinancing of the total bank debt of the Appliances Group.”

Lion Nathan (LNN): The brewer was halted from trading in Australia and New Zealand yesterday pending talks with 46.1% owner Kirin Holdings of Japan about the acquisition of remaining shares. The NZX-listed stock last changed hands at $10.60.

Skellerup Holdings (SKL): Sir Selwyn Cushing, chairman of the maker of milking equipment and rubber goods, denied the company was preparing to raise equity, but admitted the Skellerup would have no difficulty doing so if required, the Independent reported. His comment comes after Macquarie Equities raised the prospect of a capital raising, having lowered its recommendation for the company to “underperform” from “neutral”. Stock in the company slid 3.7% to 52 cents yesterday.

Sky City Entertainment (SKC): AMP Capital Investors disclosed it has become a substantial holder of the casino company’s shares, with a stake of 5.69%. Institutions supported Sky City’s placement this week, which raised $185 million at the top end of its bookbuild range. The shares fell 1.1% to $2.76 yesterday.

Businesswire.co.nz

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