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MARKET CLOSE: NZ shares fall in quiet trading; FPA drops, KMD gains

Friday 26th November 2010

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New Zealand shares fell for a second day, in a subdued session in the wake of the U.S. Thanksgiving Day holiday. Fisher & Paykel Appliances fell after cutting its guidance and Kathmandu Holdings gained on optimism about the outlook for sales.

The NZX 50 Index declined 0.42, or 0.01%, to 3264.24. Within the index, 19 stocks fell, 15 gained and 18 were unchanged. Turnover was a lower-than-average $44.2 million.

F&P Appliance (NZX: FPA ) sank 6.7% to 56 cents after lowering full-year EBIT guidance from appliances to a range of $28 million to $35 million, from the $45 million-to-$52 million range chairman Ralph Waters gave in August. "Our balance sheet position has strengthened, however appliance market conditions remain challenging," said chief executive Stuart Broadhurst.

Appliances "was very disappointing," said James Lindsay, an equities manager at Tyndall Investment Management. "The finance unit was doing reasonably well, and held things up for what would have been a worse result. The trimmed guidance was a fairly savage reduction."

Hallenstein Glasson (NZX: HLG ) fell 3.9% to $4.40 after shedding its final dividend of 17 cents a share. The stock has climbed about 36% this year, outpacing the NZX 50, which is little changed in the same period.

PGG Wrightson (NZX: PGW ) fell 2.1% to 47 cents after meat processor Silver Fern Farms posted a full-year operating loss as margins were squeezed by a strong kiwi dollar and reduced lamb numbers. Silver Fern last traded unchanged on the Unlisted platform at 70 cents.

Kathmandu (NZX: KMD ) rose 7.1% to $1.67. The retailer told shareholders at their annual meeting that sales rose 9.3% in the first 16 weeks of the financial year and predicted earnings growth in 2011.“

Kathmandu was "a bit better than expected in pretty tough conditions," Lindsay said. "We're a wee bit cautious with retailers going into Christmas trading. The last six-to-12 months have been on a gradual slide back again."

Tower (NZX: TWR ) gained 4.2% to $1.99 after the insurer and wealth manager said annual profit rose 16% on the back of growth in its health and life, and general insurance businesses, offsetting a lower profit for investments.

"This result demonstrates that Tower can perform strongly, even when the going gets tough," said managing director Rob Flannagan.

New Zealand Oil & Gas (NZX: NZO ) fell 2.1% to 92 cents. The company said today it has released the $12 million balance of a $25 million short-term funding facility to Pike River Coal, whose mine near Greymouth suffered its third explosion today and holds the bodies of 29 dead miners.

National Property Trust (NZX: NAP ) fell 1.9% to 52 cents. More than 99% of the property investors' unit holders voted in favour of stripping the management contract from a unit of the failed St Laurence group and internalising it. The deal will cost $16.3 million to redeem and cancel the manager's units next month, with a further $2.5 million buy out the contract.

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