Stocks to watch: Contact Energy, Ebos, F&P Healthcare, GFF

Tuesday 22nd September 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 balance of payments data for the second quarter is released today, which is expected to show the current account deficit shrank to 7.2% of GDP from 8.5% three months earlier. The annual deficit eased to $13 billion from $15.3 billion, according to a Reuters survey. Also out today is the Westpac McDermott Miller consumer confidence survey, which may show an improvement after the separate Roy Morgan poll showed a pick-up in confidence. Stocks eased on Wall Street amid concern valuations got too rich after a six-month rally. The kiwi dollar traded at 70.62 US cents.

Contact Energy (CEN): The biggest utility on the NZX it retained $120 million of cash in the 2009 financial year under its profit distribution plan. Some 72% of bonus shares issued were retained and 28% bought back by the company, it said. The net impact is $71 million of cash being retained that would otherwise have been paid as cash. The additional funds will help fund Contact’s investment in new power plants and gas storage, managing director David Baldwin said. The shares fell 7 cents to $5.91 yesterday.

Ebos Group (EBO): The medical supplies group is “still in growth mode,” managing director Mark Waller said in the company’s annual report, released to the NZX yesterday. “Our current conservative gearing levels provide the maximumability to consider further growth initiatives,” he said. The shares fell 0.8% to $5.90 yesterday and are up 39% in the past 12 months.

Fisher & Paykel Healthcare (FPH): The New Zealand dollar may reach as high as 72 US cents this week, according to a BusinessWire survey. A high currency erodes the value of US dollar sales, which make up almost 80% of the company’s revenue. The shares were unchanged at $3.21 yesterday.

Goodman Fielder (GFF): The Australian foodmaker sees the remainder of the year as “encouraging,” chairman Max Ould said in the company’s newsletter. “Our new strategic focus and the strength of the brands will underpin our growth and we will also benefit from improving commodity prices,” he said. The shares rose 1 cent to $2 yesterday on the NZX.

NZ Farming Systems Uruguay (NZS): Chairman Keith Smith said uncertainty remains over milk prices, with a gradual improvement seen over the coming year.“It is likely that the next 12 months will continue to be difficult, although supply should continue to fall through cow culling and farm closures around the globe, leading eventually to a supply / demand situation similar to that of two years ago,” he said in the annual report. Farming Systems expects to double milk production this financial year. The shares were unchanged at 41 cents yesterday.

Pyne Gould Corp. (PGC): The finance and agricultural investment group tumbled 7.4% to $1 yesterday as investors await details of a capital raising this week, which may top $160 million. The fully underwritten issue is expected to be taken up by existing shareholders.

Businesswire.co.nz

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