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Stocks to watch: Air NZ, Auckland airport, Allied Farmers

Thursday 26th August 2010

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Air NZ has reported earnings of $137 million, while Auckland airport reached $105 million in profit - ahead of its initial guidance, and Allied Farmers says it will renegotiate the terms of its bank facility in the wake of its finance unit going into receivership.

Air New Zealand (AIR): The national airline reported normalised earnings before taxation of $137 million for the 12 months ended 30 June, on the back of increased yields and capacity. The stock was unchanged yesterday at $1.21.

Allied Farmers (ALF): The embattled financier and rural services provider said it will renegotiate the terms of its bank facility in the wake of the receivership of its Allied Nationwide finance unit. Allied is in talks with lender Westpac and the lead manager of its rights issue, it said. The stock slid 3.6% to 2.7 cents yesterday. 

Auckland International Airport (AIA): The nation’s busiest gateway said underlying net profit after tax reached $105.05 million in fiscal 2010, ahead of its initial guidance, reflecting in part lower operating and capital expenses. As for the year ahead, the company said it expected underlying profit, which excludes any fair value changes and other one-time items, to rise to between $112 million and $118 million. That assumes international passenger growth of about 5%, it added. The stock fell 1 cent to $1.97 yesterday. 

Cavotec MSL Holdings (CCC): The owner of Christchurch-based MoorMaster released its half year earning to June 30, and posted a 11.8% decline in earnings before interest and tax to $6.6 million. Shares were unchanged at yesterday $2.45.

Guinness Peat Group (GPG): The UK-based investment company announced it was closings its New Zealand office, saying country holds “little or no opportunities” for GPG. The comments were made as the company released its half-year results, posting a $12 million net profit from a year-earlier loss of $24 million. Shares were unchanged at 64 cents yesterday.

Michael Hill International (MHI): The jewellery retailer jumped 4.6% to 68 cents yesterday after the founding Hill family said it’s looking to increase its holdings in the company to 50.1% from 48%. Emma Hill, a director at the company and spokesperson for the Hill family, said the family wants to take advantage of a depressed share price to take control. 

NZ Farming Systems Uruguay (NZS): The South American diary operator is being courted by three buyers. Yesterday the shares rose 2.9% to 72 cents, topping Olam International's sweetened takeover offer of 70 cents amid speculation Uruguay’s rival bidder Union Agriculture Group or a third, unnamed, group may push the bidding higher. Olam today said it gained Overseas Investment Office approval for its proposal. 

Pyne Gould (PGC): The financial services company released its year-end results today, with a net profit after tax of $22 million for the year ended June 30, compared to a loss of $54.4 million in the previous period. Shares were unchanged yesterday at 43 cents. 

Skellerup Holdings (SKL): The rubber goods and milking equipment group yesterday posted a full-year profit that beat its guidance after a recovery in second-half trading and forecast increased earnings for 2011. The shares jumped 9.7% to a 22-month high of 80 cents yesterday. 

Tenon (TEN): The wood mouldings company said in its annual report that the next six months are likely to show on-going market volatility and “a continuation of the current difficult operating conditions.” The company will focus on cost control, it said. The stock traded unchanged at $1 yesterday. 

Westpac (WBC): Moody’s Investor Service has placed Westpac’s New Zealand bank financial strength rating of C+ on review for a possible downgrade. The bank’s debt and deposit ratings were not affected and were affirmed with a stable outlook. Westpac fell 2.2% to $26.55 on the NZX yesterday. 

Themes of the day: The New Zealand dollar sank to below the 70 cents mark against the US for the first time seven weeks. The kiwi was last trading at 69.93 cents against the greenback. US equities rose, reversing for days of losses, as investors found some value in beaten-down stocks. In late trading, the Standard & Poor's 500 Index increased 0.3%. Stocks in Europe declined for a second day, extending a five-week low, after lower-than-forecast US durable-goods orders added to recovery fears. The Stoxx Europe 600 Index fell 0.8% to 247.54.

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