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Stocks to watch: Fletcher, Skellerup, ING Medical, Mainfreight, Tenon

Thursday 18th February 2010

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Fletcher Building shares jumped yesterday as the company posted a smaller than expected decline and Skellerup has begun to pull out of the worst impacts of the global recession posting a profit for the first half. ING Medical Properties Trusts also post postitive first half results.


Fletcher Building (NZX: FBU ): New Zealand’s biggest construction company posted a smaller-than-expected 10.5% decline in first-half earnings and lifted its outlook for the full year. Investors were “surprised on the positive side” over the results, said Alan Moore, who helps manage $300 million at Milford Asset Management. “They’ve still got a lot of uncertainty ahead. Obviously the housing situation is helping them but they need a few more commercial projects to come along.” The shares jumped 4.2% to $7.96 yesterday.

ING Medical Properties Trust (NZX: IMP ): The country’s only listed commercial landlord specialising in healthcare properties yesterday announced that operating profit rose to $6.76 million in the first half, from $5.87 million a year earlier. Net income was $6.49 million, from a year-earlier loss of $7.04 million. The shares rose 0.9% to $1.17 yesterday.

Mainfreight  (NZX: MFT ): The company reported a 12 decline in profit for the first nine months of the year. The transport company said earnings picked up in the third quarter and similar growth is expected in the final three months of the year. The shares rose 4 cents to $5.80 yesterday.

Skellerup Holdings (NZX: SKL ): The agricultural and rubber goods manufacturer, has begun to pull out of the worst impacts of the global recession, reporting a $3.28 million net profit in the first half. While that’s a 49% drop from a year earlier, it represents a slight improvement and reflects stronger sales and effective cost control than in the last half of the previous financial year. The shares were unchanged yesterday at 48 cents. 

Tenon (NZX: TEN ): The wood mouldings manufacturer broke even in the first half, including financing expenses, as the weak US housing market dragged on earnings. Tenon's performance is highly correlated to activity in the US housing market, which the company expects "will turn positive” in calendar 2010. Still, demand from China has prompted the company to run its Taupo-based plant around d the clock, it said. The shares were unchanged at 84 cents yesterday. 

Economic themes of the day: Stocks edged up in the US after strong housing data stoked optimism the American property market is emerging from its slump. Investors are awaiting more concrete signs that Europe will come to the aid of debt-laden economies such as Greece.)

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