NZX CLOSE: Shares rise; Kathmandu gains on earnings, Telecom lifts from low

Thursday 18th March 2010

New Zealand shares rose, snapping a two-day decline, as Kathmandu Holdings Ltd. beat its prospectus forecast and Telecom lifted from yesterday’s record-low close.

The NZX rose 19.72, or 0.6% to 3220.69. Within the index, 22 stocks rose, 17 fell and nine were unchanged. The turnover was $76.7 million

Kathmandu (NZX: KMD ), the outdoor equipment retailer which listed in November, rose 8.7% to $2.38, the biggest gain on the NZX50 today. The company released its first results since listing, posting a first-half profit that beat its forecast prospectus by $3 million.

“We are very impressed with the company’s first result,” said Craig Brown, who helps manage $3.3 billion at ING New Zealand, including Kathmandu shares. The retail sector was mostly up today, but Brown said that doesn’t mean the industry has necessarily passed the worst of the economic recession yet.

“Retail is still a very tough environment and investors are being very cautious,” he said.

Retailers exposed to the Australian market, including Pumpkin Patch, may fare better given the improved outlook across the Tasman, he said. Pumpkin Patch rose 0.9% to $2.22.

Telecom (NZX: TEL ) edged up 0.5% to $2.15. Yesterday the phone company hit an all-time closing low of $2.14, after it made an announcement on Tuesday that the government’s rural broadband plans and reform of the Telecommunications Service Obligation would cost it up to $56 million in earnings annually, for the following three years.

Sky City Entertainment Group (NZX: SKC ) the country’s largest casino business, rose 2.1% to $3.39. The group confirmed in its interim report that its full-year earnings, excluding the one-time impact of the sale of its cinema assets, would predictably climb 10% to 15%.

Fisher and Paykel Appliances(NZX: FPA ) dropped 3.2% to 60 cents, the biggest decline on the NZX 50 today.

SmartPay (NZX: SPY ), the EFTPOS company, increased 7.9% to 4 cents after confirming today the signing of a seven-figure contract with home improvement chain store Mitre 10.

Port of Tauranga (NZX: POT ) climbed 1.3% to $7 after agreeing to buy Tapper Transport, which operates a freight hub and warehouse system adjacent to the port’s MetroPort site in south Auckland, for $15 million. The deal includes a two-year earn out provision provided earnings targets are met to a maximum $4 million, Port of Tauranga said in a statement. The acquisition would lift per-share earnings immediately, it said.

Businesswire.co.nz

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