NZX CLOSE: NZX 50 gains; NZ Farming Systems rises, Pike slides

Wednesday 26th August 2009

New Zealand shares rose, lifting the NZX 50 Index for a third day, as NZ Farming Systems said it expected a gradual improvement in milk prices and tapmaker Methven Ltd extended its gains to a new 11-month high.

The NZX 50 rose 10.39, or 0.3% to 3090.89. Within the index, 21 stocks fell, 19 rose and 10 were unchanged. Turnover was $74 million.

NZ Farming Systems (NZX: NZS ), which is developing dairy farms in Uruguay, edged up 2.2% to 46 cents after posting a wider operating loss as expected during a “very difficult year.” Chairman Keith Smith said the company sees “gradual improvement over the course of the coming year” in milk prices.

“They are making progress and it’s a huge project,” said John Cairns, an analyst at Forsyth Barr. “There are tentative signs milk prices are beginning to bottom.”

Still, the company needed to find some $120 million over the next three years to complete its developments, fund operating deficits and pay performance fees, of which it has raised NZ$30 million.

Methven (NZX: MVN ) rose 3.2% to $1.60, leading the index higher for a second day. Chief executive Rick Fala told shareholders last month that the company is cutting costs and debt and investing in new products in the face of what’s likely to be “extremely challenging trading conditions in all markets” this year.

Pike River Coal (NZX: PRC ) fell 4.9% to 98 cents, the lowest in more than three months, after plunging yesterday on delays to its first coal shipments. The company has to bear the costs of mine development without the benefit of revenue until it can make its first sales. First shipments are now likely to be in the first quarter of 2010.

Westpac Banking Corp (NZX: WBC ) rose 2.7% to $29 and Australia & New Zealand Banking Group climbed about 2% to $24.47, tracking Australian financials higher after stronger-than-expected U.S. consumer confidence gained and home prices stoked optimism that recession will end.

Goodman Fielder (NZX: GFF ) climbed 2.3% to $1.75 after the Sydney-based foodmaker posted a 1.2% gain in full-year operating earnings and said costs of raw materials have abated from record high levels, helping restore its margins.

Auckland International Airport (NZX: AIA ), New Zealand’s busiest gateway, rose 0.6% to $1.76 after reporting a 0.5% increase in passenger volumes last month, led by a surge in arrivals from Australia - evidence that a marketing campaign and cheaper fares are luring more visitors across the Tasman.

Fisher & Paykel Appliances (NZX: FPA ) fell 1.2% to 80 cents after the appliance manufacturer was cut to ‘hold’ from ‘accumulate’ at Morningstar. The company’s disappointing earnings guidance and the departure of chief executive John Bongard creates increased uncertainty, the advisory firm said.

Sky Network Television (NZX: SKT ) fell 1.6% to $4.46 after research firm AspectHuntley lowered its 2010 profit forecast to $103.6 million from $110 million. The cut reflects the pay-TV company’s operating expenses outpacing revenue growth with the launch of MYSKY HDi, weaker advertising and lower subscriber growth.

Taylors Group Ltd (NZX: TAY ) rose 5% to $2.10. Spotless Services NZ Ltd., the laundry, hospitality and cleaning contractor, yesterday offered to buy the 34% of Taylors it doesn’t already own for $2.08 a share cash plus a fully-imputed dividend of 7 cents.

Pyne Gould Corp (NZX: PGC ). fell 1% to $1, adding to yesterday’s 10% tumble, after the government extended the deposit guarantee scheme to December 2011 while imposing a sliding scale of fees for finance companies whose credit rating is junk, or below investment grade. Pyne Gould’s MARAC unit had its rating cut to BB+ from BBB- this month, with the outlook lowered to ‘negative’ from ‘stable.’

Businesswire.co.nz

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