Stocks to watch: Telecom, Briscoes, SmartPay, Ecoya, WBC

Friday 7th May 2010

Briscoes announces it has lifted its first-quarter sales, while SmartPay is set to eliminate about 40 jobs. Telecom posts a smaller decline in profit than expected and releases the findings of the independent report into its problematic XT mobile network.

Briscoe Group (NZX: BGR ): The operator of Briscoe, Rebel Sport and Living & Giving stores announced it lifted first-quarter sales 7.4% to $96.8 million this year, though its gross profit margin was slightly below the same period in 2009 as competition increases in the sector. Managing director Rod Duke said the sales growth “enabled group profit to track ahead of last year.” The shares were unchanged at $1.31 in trading yesterday, and have gained 4.8% this year.

Smart Pay (NZX: SPY ): The EFTPOS services company announced yesterday it will eliminate about 40 jobs involved in manufacturing terminals and outsource the work to specialist companies. The shares dipped 2.5% yesterday to 3 cents.

Telecom (NZX: TEL ): The company today posted a net income decline to $97 million in the three months ended March 31, beating some analyst forecasts (47% decline to $84 million). The company kept its full-year guidance unchanged, and held its dividend of 6 cents for the quarter. Separately, the phone company released its independent report into the outages on its XT network and found customer uptake was too fast for the system to cope with. The shares were unchanged at $2.15 yesterday.

Westpac Banking Corporation (NZX: WBC ): The lender led decliners on the NZX 50 for a second day yesterday after National Australia Bank posted results that disappointed some analysts and amid concern Westpac will have to dig hard to find second-half growth. Westpac fell 6.7% to $31.15 yesterday. Australia & New Zealand Banking Group (NZX: ANZ ) dropped 3.6% to $29.

Ecoya (NZX: ECO ): The scented candle company, the latest marketing venture from the team that promoted 42 Below vodka, slipped about 2% to 99 cents yesterday, having hovered around its $1 IPO price since its debut on Monday. The company raised $10.1 million to drive sales into North America and Asia.

Economic themes of the day: American and European stocks plunged amid fears the debt crisis plaguing Greece may spread through the Eurozone and across the Atlantic, with the Dow Jones Industrial Average tumbling below 10,000 at one stage.

The kiwi dollar slumped 2% against the greenback as investors flocked to so-called safe havens after the European Central Bank sent jitters through markets in its surprisingly upbeat assessment of the Eurozone economy.

Strong employment data yesterday had earlier stoked investors' appetite for exposure to New Zealand, when the unemployment rate sank to 6% in the March quarter from 7.3% in the preceding period.

Businesswire.co.nz

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