Stocks to watch: Ecoya, Kathmandu, Pyne Gould

Thursday 25th November 2010

Ecoya reported a $2.6 million first half loss, Kathmandu announced a 9.3% rise in sales over the first 16 weeks of the financial year and Pyne Gould moved closer to transforming itself into a bank after merger approval from CBS Canterbury shareholders.

Ecoya (ECO): The scented candle company reported a $2.6 million first-half net loss on sales of $4.4 million and said it is on track to meet its May prospectus forecasts. The result include one month's trading from skincare company Trilogy purchased on September 1. Excluding Trilogy, sales were $3.1 million for the six months compared with $3.9 million for the year ended March. Shares were unchanged yesterday at 78 cents.

Kathmandu (KMD): The outdoor clothing retailer yesterday reported a 9.3% increase in sales in the first 16 weeks of the financial year and predicted earnings growth in 2011. Sales rose to $51.6 million in the 16 weeks ended Nov. 21, or 2.1% on a same-store basis, down from growth of 19% a year earlier, chief executive Peter Halkett told shareholders at their annual meeting today. Share rose 0.7% yesterday to $1.56.

New Zealand Oil & Gas (NZO): The energy exploration and production company pared gains yesterday after a second blast at the Pike River Coal's West Coast mine. NZOG owns a 29% stake in Pike, as well as numerous option and debt facilities. Officials said there was now no chance of the 29 trapped miners surviving, and rescue teams had now moved into recovery mode. Share rose 2.3% to 89 cents.

Pyne Gould (PGC): The financial services company is one step closer to transforming itself into a bank after CBS Canterbury shareholders approved the merger with Pyne Gould's Marac Finance and Southern Cross Building Society. Shares rose 2.6% to 40 cents.

Sanford (SAN): The fisheries company said growing demand for mussels is likely offset by the strength of the New Zealand dollar. The company reported a 36% decline in net profit to $25.02 million for the year to September 30. Revenue dropped 2.8% to $421 million. Sanford maintained its final dividend at 14c. Shares fell 1.1% to $4.65.

Sky Network Television (SKT): The pay TV operator launched its iSky online portal yesterday, but said subscribers will have to wait a few more weeks before they can access the service. The internet based service will be free to Sky subscribers based on their existing channel subscriptions at first, with access for non-subscribers at being launched at a later date. Shares rose 0.2% yesterday to $5.28.

Warehouse (WHS): New Zealand's biggest listed retail is expected to face challenging trading conditions as competitors eat into its market share, according to Aegis Equities Research analyst Nachiket Moghe, quoted on the ShareChat website. First quarter sales fell 1.5%, weighed down by a 9% year-on-year decline in CD and DVD sales, while its stationery store sales rose 2.9%. Moghe revised down his forecast for net profit in the year ending July 2011 to $84.5 million from $87 million. Shares fell 1.8% yesterday to $3.73.

Themes of the day: Global stocks rose on signs the US economic recovery is gathering steam, with new claims for unemployment benefits dropping to their lowest level in more than two years, while consumer spending rose for a fourth straight month in October, according to government data. In late afternoon trade the Standard & Poor's 500 Index rose 1.4% to 1,197.63, while in Europe the Stoxx 600 Index rose 1% to 266.37 at the close. The New Zealand dollar slipped to 76.14 US cents from 76.23 cents yesterday. The opening of the NZX and NZAX markets will be delayed by five minutes today to commemorate the 29 miners who lost their lives in the Pike River Coal mine explosion.

BusinessDesk.co.nz

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