Stocks to watch: Contact Energy, Fletcher, GPG

Friday 14th 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: The New Zealand rose to above 68 U.S. cents and recently traded at 67.69 U.S. cents, helped by better economic data out of Europe and weaker-than-expected U.S. retail sales. Contact Energy posted full-year earnings that halved from a year earlier. Retail sales are due out in Wellington, with a 0.3% gain expected in June and no change in the quarter, according to a Reuters survey.

Contact Energy Ltd. (NZX: CEN ): The biggest utility on the NZX 50 today posted annual profit of $117.5 million, half the year-earlier amount after poor weather, glitches with the electricity transmission system, inflexible gas contracts and a customer exodus conspired to drag down earnings. The shares rose 4 cents to $6.29 yesterday.

Fletcher Building (NZX: FBU ): The shares rose 4.2% to $7.90 yesterday, the highest level since reaching $8 on May 30 last year. Its advance mirrors a surge in building related stocks in Australia, which has skirted recession and is recovering from its downturn. Boral Ltd. gained 6.9% and James Hardie Industries NV soared 11%. Fletcher is trading at 9.4 times historic earnings compared to almost 17 times for Boral.

Guinness Peat Group (NZX: GPG ): The investment company chaired by Ron Brierley, is prepared for its half-year loss when it reports at the end of this month, and signalled it may “have to endure another poor result” at the end of the year. Still, “things are happening” and the company claims its outlook is on the rise. The shares rose 2 cents to 80 cents yesterday.

Lyttelton Port Co. (NZX: LPC ): The South Island’s biggest port company signed a new commercial contract with Fonterra for the transport of dairy products for export through the Container Terminal. Fonterra has slashed its ties with the ports of Timaru and Taranaki, using KiwiRail’s cheaper freight costs by channeling greater volumes through Auckland, Tauranga, Lyttelton and Napier. Port of Tauranga (NZX: POT ) rose 0.8% to $6.55 yesterday and Lyttelton Port was unchanged at $2.40.

Pyne Gould Corp. (NZX: PGC ): The finance company’s Marac unit was cut to BB+, below investment grade, by Standard & Poor’s yesterday, which lowered its outlook to ‘negative.’ "Marac’s credit profile has weakened because of the greater-than-expected deterioration in the company's asset quality over recent months within the property development sector," S&P analyst Derryl D'silva said. The shares rose 2.9% to $1.41 yesterday.

NZ Farming Systems Uruguay (NZX: NZS ): The developer of dairy farms in South America may report annual earnings as soon as today and is expected to post a loss of about $23 million, reflecting drought in Uruguay, weaker global prices for milk and the impact of delays in securing debt funding. The shares fell 3.9% to 50 cents yesterday.

Businesswire.co.nz

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