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Stocks to watch: AIA, Allied Farmers, NPT

Thursday 30th September 2010

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Opposition to Auckland Airport buying a stake in Queenstown Airport raises concern the deal will "lock up" Queenstown's assets, Allied Farmers has sold a former Hanover loan, allowing it to repay debt, while National Property Trust is predicting dividend payments will be less than predicted due to the challenging lease market.

Auckland International Airport (AIA): The Queenstown Community Strategic Assets Group opposing the sale of a 25% stake in Queenstown Airport to Auckland International Airport said the deal "locks up" the tourist gateway's assets and is contractually too onerous, according to press reports. The group said it is also launching an advertising campaign in support of its legal proceedings, aimed at getting a new council to overturn the sale. Shares were unchanged yesterday at $2.07.

Allied Farmers (ALF): The embattled finance company has sold a former Hanover Finance loan to an undisclosed party, allowing the company to complete repayment of its facility with Westpac. Allied, which unsuccessfully tried to reinvent itself as a major lender by taking on the Hanover and United loan books in a debt-for-equity swap, said it’s entered a conditional agreement to sell one of the Hanover loans, which will cover the $2 million left owing to Westpac. Shares rose 11.5% yesterday to 3 cents. 

National Property Trust (NAP): The property investor, which plans to dump its manager and become a regular company, said a challenging leasing market means its dividend payment will be lower than forecast. The annual dividend distribution will be about 4 cents a unit, down from the trust’s May estimate of about 4.5 cents. The payment amounts to about 90% of distributable earnings. The trust has experienced lower than anticipated demand for vacant space and said the Christchurch earthquake may exacerbate the situation. The units last traded unchanged at 53 cents and have gained 8% this year. 

Postie Plus Group (PPG): The clothing retailer reported on Friday a 6.5% drop in full-year pretax earnings and said retailing will continue to struggle through to Christmas. Better trading in 2011 should lead to resumption in dividends. The shares were unchanged on Friday at 32 cents. 

Pulse Utilities (PLU): The electricity retailer trimmed its forecast EBITDA loss to $900,000 for the year ending March 31, from a previous estimate of $1.25 million The following year the company expects to report EBITDA of more than $6.5 million. The shares last traded on September 3 at 44 cents. 

Sanford (SAN): The fishing company has applied for antitrust clearance to buy Pacifica Seafoods Group, adding to acquaculture assets it acquired from Sealord a year ago. The transaction would signal a move in strategy for the Dunedin family of Sir Cliff Skeggs, who founded the seafood, transport, maritime wine and tourism group that owns Pacifica. The Skeggs Group-owned company was registered in June. No price or terms were given in the Commerce Commission statement released on the NZX. Pacifica sells mussels and farms salmon and oysters. Shares rose 1% yesterday to $4. 

Smiths City Group (SCY): The company has announced the resignation of independent director Susan Jane Sheldon, effective on Nov 30. Sheldon was appointed a director in May 2005. Shares were unchanged yesterday at 32 cents. 

Tourism Holdings (THL): The campervan rental company said current performance and booking trends “see a softening of the backpacker and UK markets in particular.” Chief executive Grant Webster says in the annual report that the strong kiwi and Australian dollars are also contributing to “lower on-the-ground spend once visitors arrive.” Webster said 2011 “is expected to show minimal growth from a rental revenue and visitation perspective.” The stocks was unchanged at 80 cents on Friday. 

Turners & Growers (TUR): The fruit and vegetable company is set to start the first ENZA MEGAkiwi programme into Europe this year, selling the new large variety of green kiwifruit grown in Greece. The company is working to establish northern and southern hemisphere growing hubs for its range of kiwifruit varieties to ensure tear-round supply for international markets. Shares were unchanged at $1.40 and last traded on September 23.

Themes of the day: Wall Street fell overnight amid concerns that Europe's debt crisis will worsen and the profit outlook for banks and retailers is deteriorating, with the Standard & Poor's 500 Index down 0.3% to 1,144.72. Gold futures nudged higher to a new record as support for the US dollar continued to erode, with futures for December delivery touching as much as US$1,314.80 an ounce. Gold is rallying for a 10th straight year, which Bloomberg reported was the longest run since at least 1920. Statistics NZ is set to release data on the number of building consents issued in August. New Zealand's construction sector has eased since April, with residential and commercial sectors sliding into negative territory.

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