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NZX CLOSE: Shares edge higher; Sky TV gains with earnings, TUA jumps

Friday 19th February 2010

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New Zealand shares edged higher, paced by companies that posted improved earnings, including Sky Network Television and Turners Auctions.

The NZX 50 Index rose 5.31, or 0.2%, to 3107.08. Within the index, 18 stocks rose, 15 fell and 17 were unchanged. Turnover was $79.8 million.

Companies ranging from Sky Network to Fletcher Building, Sky City Entertainment Group and Turners Auctions have posted results that beat estimates so far this earnings season, helping soothe investors apprehensive about the lingering effects of recession and the global downturn.

“Running into this reporting season everyone was holding their breath – people were nervous that we were still in freefall,” said Paul Harrison, equities manager at BT Funds Management, which has about $2.3 billion in investments. “But generally speaking the results have been pretty good,” he said. “We didn’t expect CEOs to highlight a bit of light at the end of the tunnel.”

Sky TV (NZX: SKT ) rose 1.9% to $4.80 after New Zealand’s dominant pay-TV provider posted a 19% gain in first-half profit as growth in MYSKY HDi subscribers caught up with costs and the company paid less interest. Full-year profit would be in a range of $88 million to $104 million, from $88 million in 2009.

Overall net subscriber growth in the first half was a tepid 5,976, from growth of 10,493 a year earlier, though chief executive John Fellet predicted a revival when winter sports some on stream. The company focused on converting existing subscribers to MYSKY HDi rather than chase new customers.

Turners Auctions (NZX: TUA ) jumped 16% to $1.45 after the largest single seller of motor vehicles in New Zealand tripled its full-year profit after reducing purchases of used vehicles in Japan, allowing costs to fall more than revenue.

Allied Farmers (NZX: ALF ), the rural services and finance group that took on Hanover Finance’s loan book, tumbled 11% to 11 cents after the company said NZX had reversed its position on the stock entering the benchmark index. The NZX had told market participants this week that it would join and some investors had bought shares in anticipation.

Charlie’s Group (NZX: CHA ), the juicemaker set up by Stefan’s Orange Juice founder Stefan Lepionka and entertainer Mark Ellis, rose 3.2% to 9.6 cents after announcing it has abandoned plans to raise more capital because a return to profitability has taken the pressure off its balance sheet. 

Chairman Ted van Arkel said an equity raising was “no longer necessary given the profitable trading of Charlie’s and the substantially improved balance sheet.”

Contact Energy (NZX: CEN ), one of the few large-cap companies yet to report earnings, rose 0.9% to $5.70. The utility’s application for a fast-tracked resource consent for the 250 megawatt Tauhara geothermal power station will be the first to be considered by Environment Minister Nick Smith under the new, streamlined Environmental Protection Authority process.

Contact may post a 27% jump in first-half profit when its reports next Tuesday, recovering from a year-earlier period when national grid constraints and limits on the Cook Strait cable stymied its trading.

NZ Farming Systems Uruguay (NZX: NZS ) was the biggest gainer on the NZX 50 today, rising 5.3% to 40 cents. Ryman Healthcare  (NZX: RYM ) climbed 2.5% to $2.02 and Auckland International Airport (NZX: AIA ) rose 2.2% to $1.85.

Pan Pacific Petroleum (NZX: PPP ) was the biggest decliner, shedding 5% to 38 cents. Fisher & Paykel Appliances (NZX: FPA )  dropped 3.2% to 61 cents.

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