Stocks to watch: EBOS profit gains, FPA talks to bankers

Friday 27th February 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: Stocks fell on Wall Street, led by health insurers. President Barack Obama proposed increases in the top US tax rates, under a budget proposal that would reap almost US$1 trillion from the wealthy to fund tax breaks for the poor. In New Zealand, the jobs summit has kicked off in Auckland.

Cavotec MSL Holdings (CCC): The manufacturer of mobile power supplies posted a 38% increase in full-year profit to $19 million as they boosted sales and benefited from the weaker New Zealand dollar. While the board was happy with the result, it has postponed its decision on a dividend until the second quarter. Its stock rose 8% to $2.70 yesterday.

EBOS Group (EBO): The medical products distributor yesterday posted a 20% gain in first-half profit to $8.5 million. "All of our businesses in the Healthcare portfolio performed up to expectation and ahead of last year despite the prevailing macroeconomic environment," said managing director Mark Waller. "Our Australian healthcare business was once again our strongest performer." The shares rose 0.9% to $4.44 yesterday and are little changed in the past months, while the NZX 50 fell 9%.

Fisher & Paykel Appliances (FPA): The shares have tumbled 63% this year. Yesterday, the company said it is in talks with its banks to ensure it doesn't breach lending covenants as at March 31, and is mulling raising new equity and selling property to bolster it balance sheet. The shares were unchanged at 50 cents.

Goodman Property Trust (GMT): The trust's manager, Goodman (NZ), announced the sale of a property in Wiri, Auckland, for $12.1 million, in line with its September 30 book value. The sale is its fourth this year as the trust moves to maintain the strength of its balance sheet. The trust's units fell 2.3% to 85 cents.

Hellaby Holdings (HBY): The diversified investment group yesterday posted a first-half profit of $400,000, down from $5 million a year earlier. The company faced "an unprecedented rate of decline in global and local market conditions." Revenue fell 4% to $242 million. Margins were "severely affected" in some businesses, it said. The shares tumbled 14% to 60 cents yesterday.

Lion Nathan (LNN): The brewing company said it is on track to report full-year earnings of A$300 million to A$315 million, up as much as 16% from 2008. A strong performance in Australia, with net sales and volumes growing, would lead the earnings gain, chief executive Rob Murray told shareholders at their annual meeting yesterday. New Zealand beer volumes would be in line with the previous year, while Australia's heat wave and bushfires would debt this year's wine vintage. The shares rose 2.3% to $11.25 on the NZX yesterday.

Lyttelton Port (LPC): The largest South Island port reported a 16% increase in first-half profit to $5.7 million as revenue climbed 43%. The gain reflected increased container volumes and lower maintenance costs, it said. The shares were unchanged at $2.25 yesterday.

Restaurant Brands New Zealand (RBD): The franchise holder for KFC, Pizza Hut and Starbucks said earnings in the year ending Feb. 28, excluding non-trading items, will be about $11 million. That's up from its previous forecast of $9 million to $10 million. The company ended the year "with stronger sales and better margins, particularly from its KFC stores, some lowering of G&A overheads and significant reductions in funding costs," it said. The shares rose 3.3% to 62 cents yesterday.

Satara Co-operative Group (SAT): The kiwifruit company yesterday reported annual profit rose 57% to $2.1 million, reflecting "a post harvest efficiency drive going into the 2008 season and the continued rationalisation of orchard leases." The cooperative's investment shares last changed hands at 75 cents on February 19.

By Jonathan Underhill

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