Friday 14th November 2008
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Themes of the day: The number of Americans on unemployment benefits rose to a 25-year high while the US government reported a record US$237 billion budget deficit and Germany sank into recession. The OECD said its member economies may shrink 0.3% next year.
Cavalier Corp. (CAV): The carpet maker's managing director, Wayne Chung, told shareholders at their annual meeting yesterday that market conditions had deteriorated, making it difficult to give earnings guidance. "A decline in discretionary spending is an inevitable result that is bound to hurt our carpet business," he said. The shares traded at $2.07 yesterday and has dropped 25% this year.
Life Pharmacy (LPL): The pharmacy chain and franchisor posted a first-half loss of $415,000 as costs soared. The company said yesterday that current tough economic climate has created a difficult trading period for most retailers. "The outlook for the traditionally profitable Christmas period remains challenging with lower levels of consumer spending and increased retail competition expected," it said. The stock last traded at 45 cents on October 20.
ProvencoCadmus (PVO): The company yesterday it will sell its New Zealand eftpos finance book to Finance Now, a subsidiary of SBS Bank. The purchase price for the eftpos finance contracts and related assets is $11.9 million. ProvencoCadmus will use the proceeds to pay down debt. The shares traded unchanged yesterday at 13 cents and have tumbled 75% this year.
Rakon (RAK): The manufacturer of components used in navigation systems said first-half profit fell 66% to $1.97 million as waning global demand hurt sales and charges for depreciation and interest rose on losses in France. The stock sank to $1.69 yesterday and has fallen more than 55% this year.
Westpac (WBC): St. George Bank shareholders in Australia have approved a merger with Westpac, creating one of only 17 banks in the world rated 'AA' or higher. The deal will make Westpac Australia's second-largest bank behind National Australia Bank (NAB). Westpac's share price has fallen 40% on the NZX this year, and was at $20.30 yesterday.
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