NZX CLOSE: NZ shares fall for a second day; FPA sinks on outlook

Friday 25th September 2009

New Zealand shares fell for a second day after Fisher & Paykel Appliances said it won’t meet prospectus earnings forecasts and has to talk to lenders about a looming covenant breach.

The NZX 50 Index fell 19.17, or 0.6%, to 3111.25. Within the index, 31 stocks fell, eight rose and 11 were unchanged. Turnover was $116 million.

Stocks weakened on Wall Street and on into Asia after an unexpected drop in U.S. home sales and after Nomura Holdings, Japan’s largest brokerage announced a record $5.6 billion share offering, sending Japanese financials tumbling.

F&P Appliances sank 12% to 65 cents after the manufacturer that’s 20% owned by China’s Haier Group said depressed trading conditions in the U.S. meant competition for sales of home appliances was been more intense than expected. It is now forecasting a full-year loss of $2 million to $5 million, from a prospectus estimate of $11.7 million profit.

“Appliances was quite a bit weaker – no-one was expecting them to come out with a profit downgrade like they have,” said Rickey Ward, fund manager at Tyndall Investment Management. As a backdrop, “there were weaker markets globally and in the U.S.”

Pumpkin Patch fell 4.6% to $1.88. The children’s clothing chain this week posted a full-year loss on costs to exit 15 unprofitable U.S. stores and a decline in earnings from its biggest markets of Australia and New Zealand. The full-year net loss of $26.7 million reflected $39.9 million in impairments and one-time costs.

Postie Plus Group, the clothing and babyware chain part-owned by Kathmandu founder Jan Cameron, fell 2.4% to 41 cents after reporting a return to profit on the sale of unprofitable assets and improved stock management. “Market conditions remain challenging with any recovery in consumer confidence likely to take time,” said chairman Peter van Rij.

Tower Ltd. fell 2.3% to $1.70. The insurance and funds management business today said its $81.3 million rights issue was oversubscribed, with applications amounting to about $120 million.

Rakon Ltd. fell 4% to $1.20. The manufacturer of components for navigation devices this week completed a $45 million placement, selling shares at $1.10 apiece, a 26% discount to its price before the offer. It is raising funds to expand its Chinese manufacturing operations.

New Zealand Refining fell 2.4% to $4.51. Chairman David Jackson said the nation’s only refinery expects to operate at a loss in the second half because of the high kiwi dollar, pressure on margins and a planned four-week shut-down this month.

Goodman Fielder, the Australasian foodmaker, rose 2.6% to $1.95, leading the index higher.Turners & Growers Ltd. fell 2.7% to $1.45. The fruit and vegetable distributor yesterday made a direct appeal to kiwifruit growers to support its drive to crack open Zespri’s monopoly on some $1 billion of export fruit.

Businesswire.co.nz

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