Stocks to Watch: F&P Appliances, Fletcher, Tower

Monday 29th November 2010

F&P Appliances reduced its full-year EBIT forecast, Aegis Equities analyst Nachiket Moghe forecasts a $345 million profit for Fletcher Building and Tower announced a 16% rise in profit to $58.1 million.

F&P Appliances Holdings (FPA): The whiteware maker lowered full-year EBIT guidance from appliances to a range of $28 million to $35 million, from the $45 million-to-$52 million range. Chief executive Stuart Broadhurst said that while the balance sheet remains strong, "market conditions remain challenging". Shares fell 6.7% on Friday to 56 cents.

Fletcher Building (FBU): New Zealand's biggest building company is rated as 'hold' by Aegis Equities analyst Nachiket Moghe, quoted on the ShareChat website. He is forecasting net profit will rise to $345 million for the year ending June 2011 from $272 million the previous year, and compares with Fletcher's range of between $311 million and $405 million with the average being $357 million for the same period. Shares fell 0.7% on Friday to $8.04.

Methven (MVN): The tap and bathroom fittings maker lifted net profit by 8.3% to $4.5 million before UK restructuring costs for the six months to September 30. The result was based on operating revenues of $62.8 million for the period, down 7.7%, and earnings before interest tax depreciation and amortisation of $8.8 million, up 3.4% compared the same period in the previous year. Share fell 1.2% on Friday to $1.63.

National Property Trust (NAP): More than 99% of the property investors' unit holders voted in favour of stripping the management contract from a unit of the failed St Laurence group and internalising it. The deal will cost $16.3 million to redeem and cancel the manager's units next month, with a further $2.5 million buy out the contract. Shares fell 1.9% on Friday to 52 cents.

New Zealand Oil & Gas (NZO): The energy exploration and production company last week released the $12 million balance of a $25 million short-term funding facility to Pike River Coal, whose mine near Greymouth suffered its fourth explosion over the weekend and holds the bodies of 29 dead miners. Shares fell 2.1% on Friday to 92 cents.

Tower (TWR): The insurance company controlled by Guinness Peat Group lifted net profit 16% to $58.1 million for the year to September 30, as it boosted operating revenue 17% to $564.2 million while clamping down on net claims expenses, which rose just 1.8% to $274.9 million. Total expenses rose 11% to $467.8 million with management and sales expense falling 4.7%. Shares rose 4.2% on Friday to $1.99.

Themes of the day: Global equities closed the week softer as risk appetites waned on speculation that Ireland's debt crisis will spread to Europe's other precariously balanced states, and increased tensions between North and South Korea following an exchange of artillery fire. The Standard & Poor's 500 Index fell 0.8% on Friday to 1,189.40, while in Europe the Stoxx 600 fell 0.4% to 266.60. The New Zealand dollar continued to come under pressure, and fell as low as 74.81 US cents from 75.51 cents on Friday in New York, and recently traded at 75.07 cents. Today’s National Bank Business Outlook is expected to continue its gradual trend higher. Government data today is expected to show a trade deficit of $438 million in the month of October, according to a Reuters survey.

BusinessDesk.co.nz

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