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Stocks to watch: Charlie's Group, Pyne Gould, Vital Healthcare

Tuesday 23rd November 2010

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Juicemaker Charlie's sees profits rise after Aussie sales surge, Pyne Gould moves a step closer to its bank transformation and Vital Healthcare shares slip ahead of its AGM when it will ask unit holders to approve its Aussie acquisition.

Charlie's Group (CHA): The juice and softdrink company told shareholders yesterday at its annual meeting that first-half net profit is expected to rise by 43% on the back of a surge in sales. Chairman Ted van Arkel says gross sales for the six months ending December will be about $21 million, "given the tremendous growth in Australian sales and with New Zealand keeping steady". Shares rose 7.4% yesterday to 16 cents.

Kiwi Income Property Trust (KIP): The property investor is likely to face headwinds in the retail and office markets, according to Goldman Sachs & Partners analyst Buffy Gill, quoted on the ShareChat website. She said underlying rentals has weakened in the six months to September 30, with office rentals down 2.6% and retail rentals down 1.3%. Excess office capacity in the Auckland is expected to take a number of years to clear, putting additional pressure on revenue growth. Shares were unchanged yesterday at $1.05.

New Zealand Refining (NZR): Northland-based oil refinery said "healthy" refining margins continued in September and October, with a processing fee of $34.9 million from a throughput of 5.3m barrels. The gross refining margin of $US6.96 for the period was marginally down from $US7.16 in July and August, but above the margins in the first six months of the year. Shares rose 1.6% yesterday to $3.76.

Pyne Gould (PGC): The financial services company looking to transform itself into a bank got one step closer to achieving its goal after shareholders in Southern Cross Building Society approved the deal. Almost 99% of SCBS shareholders signed off on the arrangement, which will fold SCBS and Canterbury Building Society into a new entity with Pyne Gould's Marac Finance, though a quorum for depositors wasn't met. Pyne Gould plans to distribute most of its stake in the entity if the merger is successful. Shares fell 2.5% yesterday to 39 cents.

Telecom (TEL): The Telecommunications Users Association is calling on the Commerce Commission to scrap mobile termination charges next year and to intervene in the market if carriers do not pass savings on to customers. Shares in Telecom, New Zealand's second largest mobile operator, rose 2.4% to $2.18 yesterday.

Vital Healthcare Property Trust (VHP): The specialist investor in medical clinics, fell 7.4% to $1.13 ahead of its annual meeting tomorrow, when it will ask unit holders to approve the acquisition of 12 properties in Australia and a new fee structure. The trust is banking on a bigger take-up of life insurance by Australians in a A$164.5 million purchase of private hospitals and medical centres across the Tasman, and if successful will boost its portfolio value 70% to about $513.8 million.

Themes of the day: Global equities fell after news that Ireland would accept a bailout failed to ease concerns around sovereign debt defaults in Europe. In late afternoon trade the Standard & Poor's 500 Index fell 0.4% to 1,194.41, while in Europe the Stoxx 600 fell 0.7% to 267.74 at the close. The New Zealand dollar fell to 77.09 US cents from 77.34 cents yesterday after Standard & Poor's put the nation's foreign currency credit rating on a negative outlook over ongoing offshore indebtedness. The Reserve Bank of New Zealand is set to release its survey of expectation for the December quarter today.

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