Stocks to watch: Telecom profit slumps, Briscoe outlook, Contact, NZ Refining

Friday 21st 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: Stocks on Wall Street came back after a regional manufacturing survey in the U.S. gained. The kiwi dollar rose to $67.70 on the back of revived appetites for higher yields. Telecom Corp., the largest company on the NZX 50 index, posted a 44% slump in profits as its retail and AAPT businesses struggled in a more competitive environment and the company begins preparing to migrate from its existing mobile network.

Briscoe Group Ltd (NZX: BGR ): Managing director Rod Duke expects the operator of several chains to post a half-year profit of around $6.5 million when it reports next month. Duke said the group revised their outlook down some $820,000 due unacceptable levels of profitability. The stock rose 0.9% to $1.15 on the stock exchange yesterday.

Colonial Motor Co. (NZX: CMO ): The company yesterday reported full-year net income fell 36% to $4.6 million, reflecting an impairment loss in the first half and a $1.83 million reduction in the value of its properties. The shares last traded on August 19 at $2.36.

Contact Energy Ltd (NZX: CEN ): The largest utility on the NZX 50 is rated a ‘buy’ by ABN Amro Craigs analyst Daniel Reynolds, according to the ShareChat website. He predicts operating profit will rise to $488.6 million in the current year from $445.3 million as it trims spending and defers new plants. The shares fell 6 cents to $6.19 yesterday.

New Zealand Refining (NZX: NZR ): Shares of the nation’s only oil refiner tumbled 8.8% to $5.06 yesterday, the lowest level in almost four years. The company has shed 23% since its announcement on August 18 that it is facing an operating loss in the second half of the year after posting a 2.8% drop in the first half as its refining margin shrank.

SmartPay Ltd (NZX: SPY ): The company soared 31% to 3.4 cents, its second daily jump, after the merchant services company snapped up the Payments Division of ProvencoCadmus, in receivership, for $6 million, becoming New Zealand’s largest EFTPOS company.

Telecom Corp. (NZX: TEL ): The largest listed phone utility’s profit tumbled 44% to $398 million this year as declining revenues in its retail and AAPT businesses were compounded by the depreciation of its outgoing mobile network. Chief executive Paul Reynolds expected much the same for next year’s earnings, despite a surge in uptake for its new XT mobile network. The shares slid 1.1% to $2.67 in trading yesterday.

Businesswire.co.nz

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