Stocks to watch: Abano, AMP Office, New Image

Wednesday 29th September 2010

Abano is considering returning proceeds from the sale of its stake in National Hearing Care to shareholders early next year, property investor AMP NZ Office Trust's restructure has had a mixed response from KordaMentha, while New Image Group expects a solid lift in earnings next year, driven by economic growth in Asia.

Abano Healthcare Group (ABA): The retirement village said it considering returning the proceeds from the sale of its 13% stake in National Hearing Care to shareholders in early 2011. NHC is an Australasian audiology company which acquired Bay Audiology from Abano in November 2009. As part of the Bay sale transaction, Abano and interests associated with Bay’s founder, Peter Hutson, acquired the shareholding in NHC for NZ$30 million. Shares rose 0.6% yesterday to $5.20.

AMP NZ Office Trust (APT): The office prime property investor looking to restructure itself into a company won chequered approval for its transformation from KordaMentha. The independent adviser said that while the change in structure will reduce the incentive for the manager to drive increased fees through asset growth, base fees remains about 20% higher than the market leading fee models. Shares fell 2.6% yesterday to 76 cents.

New Image Group (NEW): The maker of health tonics derived from colostrums said it expects a “solid lift” in sales and earnings in 2011, driven by stronger economic growth in Asia. The company’s plan to list its Malaysian subsidiary on the Malaysian stock exchange is progressing, it said. The shares last traded on September 27 at 30 cents.

NZ Farming Systems Uruguay (NZS): The South American dairy farm operator fell 4.4% to 66 cents yesterday, following the completion of Olam International’s takeover offer, which lifted its holding to about 77%. “The deal is done, so there is nothing to support the price,” said Rickey Ward, domestic equities manager at Tyndall Investment Management.

NZ Refining (NZR): Chairman David Jackson said in the company’s first-half report that margin improvements seen in the first half of the year have continued through July and August. Still, market fundamentals “have not yet changed to such an extent that would indicate a sustained recovery in refining margins - there is still continuing volatility in our processing fee and the New Zealand dollar going forward.” If fees and the exchange rate stay at current levels, the company expects to pay a final dividend, he said. The shares rose 2.5% to $3.69.

NZ Windfarms (NWF): The windfarm developer forecasts a profit for the year ended June 30, 2011, with positive cash flows. The delay in commissioning the last 32 turbines will hurt 2011 revenue, chairman Derek Walker said in the annual report. He said EBITDA is likely to be 16% below Investment Statement forecast. The shares rose 4.4% to 24 cents.

Pumpkin Patch (PPL): The children’s clothing retailer has been revised from “buy” to “hold” by Buffy Gill, an analyst at Goldman Sachs JB Were, quoted on the ShareChat website. The company is expected to face subdued short-term prospects, particularly in its wholesale division, with sales were down 15%, largely due to the stronger New Zealand dollar against the US dollar. In addition Australian sales were down 5.6% in the year and down 13.5% in the second half. Shares were unchanged yesterday at $1.93.

Renaissance (RNS): The distributor of Apple products said the consumer electronics company will appoint an additional distributor starting on October 1. The new arrangement doesn’t affect the current relationship between Apple and Renaissance, said chief executive Richard Webb. The shares fell 2.8% to 35 cents yesterday.

Themes of the day: Stocks on Wall Street rose amid speculation the Federal Reserve will extend its asset purchase programme and prospects of more M&A activity, with the Standard & Poor's 500 Index gaining 0.7% to 1,150. The kiwi climbed to 73.87 US cents from 73.07 cents yesterday, after the greenback lost ground amid the quantitative easing speculation and poor US consumer confidence numbers, which fell to 48.5 in September based on the Conference Board's confidence index. This missed the 52.1 forecast in a Bloomberg survey and the lowest reading in seven months. Overseas merchandise data is expected to show a trade deficit of $500 million last month.

Businesswire.co.nz

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