Stocks to watch: CER Group, F&P Appliances, Pyne Gould, WHS

Monday 21st September 2009

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

Themes of the day: Data this week is expected to show the New Zealand economy contracted 0.2% in the second quarter, after shrinking 1% in the first quarter, in what may herald the last hurrah of the recession. The current account deficit probably widened to $1.7 billion in the second quarter from $1.25 billion three months earlier, according to a Reuters survey. The latest Roy Morgan Consumer Confidence Rating rose 5.5 points to 120, with 56% of New Zealanders expecting to be better off financially in 12 month’s time. A separate survey of 700 Auckland businesses found 58% see better business conditions in the next six months. Shares on Wall Street edged higher on Friday while the kiwi dollar traded near 71 US cents.

CER Group (CER): The company will release its annual results today, which will vary materially from its previously released unaudited results because of a $700,000 impairment of goodwill related to its investment in the New Zealand Nature Company. The carrying value of the asset is being written down to $3.6 million from $4.3 million. The shares surged 33% to 1.2 cents on Friday, when it announced the revision was pending.

Fisher & Paykel Appliances (FPA): Chief executive John Bongard will leave the company at the end of this month, three months earlier than planned, as he battles with prostate cancer. Stuart Broadhurst, chief operating officer for appliances, will act as chief executive while the company searches for a permanent replacement. The shares were unchanged at 80 cents on Friday.

Horizon Energy Distribution (HED): The Bay of Plenty utility said its largest shareholder, Eastern Bay Energy Trust with 77%, hasn’t yet decided whether it will support an offer for control of company from Marlborough Lines at $3.96 a share. Horizon is appointing an independent valuer to assess the offer. The shares last traded at $3.20.

Pyne Gould Corp. (PGC): The finance and agricultural investment group plans to announce 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. The shares rose 2.9% to $1.08 on Friday.

Restaurant Brands (RBD): The shares jumped 16% to $1.19 on Friday after the fast-food operator forecast an 87% jump in first-half earnings excluding non-trading items of about $8.7 million, reflecting a turnaround at its Pizza Hut franchise and sustained sales growth for the KFC chicken outlets.

Sky Network Television (SKT): The nation’s biggest pay-TV company took out full-page advertisements in newspapers to apologise for farmers for glitches that prevented Fonterra’s restructuring material being broadcast. The shares rose 3 cents to $4.48 on Friday.

Warehouse Group (WHS): The biggest retailer on the NZX 50 is rated ‘hold’ by Craigs Investment Partners analyst Daniel Reynolds, according to the ShareChat website. Reynolds raised his forecast for 2010 earnings before interest and tax by 5.8% to $129.8 million and said he expects a “gradual volume-led sales recovery in 2010.” ‘Hold’ is the average recommendation of 10 analyst recommendations compiled by Reuters. The shares fell 3 cents to $4.12 on Friday.

Businesswire.co.nz

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