Stocks to watch: Tourism Holdings avoids loss, NZOG profit slumps, Pyne Gould

Wednesday 26th August 2009

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

Themes of the day: US consumer confidence and house prices gained, helping boost stocks on Wall Street, as Ben Bernanke was nominated by President Barack Obama to chair the Federal Reserve for a second term. The kiwi dollar held above 68 US cents for a fourth straight day on the upbeat sentiment. New Zealand’s central bank expects an annual inflation rate of 1.8% in the September quarter, and lifted its average two-year estimate to 2.3% from 2.2%.

Fisher & Paykel Appliances (FPA): The appliance manufacturer was cut to ‘hold’ from ‘accumulate’ at Morningstar, according to the ShareChat website. The company’s disappointing earnings guidance and the departure of chief executive John Bongard creates increased uncertainty, the advisory firm said. The shares rose 1.3% to 81 cents yesterday.

New Zealand Oil & Gas (NZO): The oil and gas explorer announced its full-year profit slumped 45% to $53.2 million. It also announced it has entered a conditional agreement to acquire a 40% stake in permit PEP 38491, which lies in the northern Taranaki Basin, from American-owned operator Westech. The American company will retain 50% of the permit, with the final 10% owned Mighty River Power. NZOG’s shares slipped 0.6% to $1.65 yesterday.

Pike River Coal (PRC): The mining company must seek a further extension on conditions of its convertible bonds after slower-than-expected progress on mine development put back the first shipments of the fuel. The shares dropped 9.7% to $1.03 yesterday, the biggest decline on the NZX 50. “The delay doesn’t detract from the value of the business except for the cash flow and that was important to them,” said Ian Waddell, head of stockbroking at McDouall Stuart.

Pyne Gould Corp. (PGC): Shares of the company, which has been planning to turn itself into a bank, tumbled almost 10% to $1.01 yesterday 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.’

Sealegs Corp. (SLG): The manufacturer of amphibious boats said it has received record new orders in the last six weeks. Recreational customers have ordered eighteen of its craft in the six weeks in what is historically a quieter time for orders. “It definitely feels like the economic tide has changed and we are now moving our forward planning to a cautiously optimistic weighting,” the company said. The shares jumped 15% to 23 cents yesterday.

Tourism Holdings (THL): The tourism operator that fell out of the NZX50 index reported an 80% slump in profit to $2.9 million as the decline in international visitors and the cost of restructuring the business weighed on the bottom line. Still, the sale of Kelly Tarlton’s and Milford Sound Red Boats and its holding in InterCity Holdings helped the company avoid a loss. It recorded a $1.4 million loss on its continuing operations. The shares fell 1.8% to 56 cents in trading yesterday, and have sunk 15% this year.

Businesswire.co.nz

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