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Stocks to watch: Dorchester, Fletcher, Hellaby Holdings

Tuesday 7th September 2010

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Dorchester is expecting to increase lending on its motor vehicle book from $13 million a year to $70 million, Fletcher Building shares rose 5% yesterday on prospects as a result of the Canterbury earthquake and Hellaby Holdings has turned the recovery corner.

Dorchester Pacific (DPC): The finance company told shareholders at its first AGM since its capital restructuring that it expected lending on its motor vehicle book to increase from $13 million a year to about $70 million within the next three years, according to press reports. Currently the company is lending directly to individuals hoped to use dealer networks to find customers. Shares were unchanged yesterday at 11 cents.

Fletcher Building (FBU): Shares of New Zealand's biggest construction company rose 5% to $8.41 and Steel & Tube Holdings (STU), a manufacturer of materials for the construction industry, rose 1.7% to $2.37 on speculation they stand to gain from rebuilding in Christchurch. Chief executive Jonathan Ling told BusinessDesk he will talk to Christchurch mayor Bob Parker this week though any benefits of residential and commercial rebuilding will be months away.

Hellaby Holdings (HBY): The investment company has turned the recovery corner with management continuing to squeeze more out of the business, said Craigs Investment Partners analyst Selwyn Blinkhorne, quoted on the ShareChat website. Hellaby's normalised net income for the year ended June rose 66% to $8.8 million compared to the previous period, 19% ahead of Blinkhorne's forecast. Shares fell 1.1% yesterday to $1.83.

Lyttelton Port Co. (LPC): The South Island's largest port resumed core operations on Saturday after the quake but says it did sustain "significant damage" and the cost of repairs is likely to be tens of millions of dollars. The shares last traded unchanged at $2.40. The company is 78.8% owned by Christchurch City Council.

New Zealand Wool Services International (WSI): The wool scourer and exporter reported a normalised after tax operating profit of $2.2 million in the year ended June 30, after turning from a first-half loss to a second-half profit. "We are on track to achieving a much improved result in the 2010/11 year with better margins in sales, greatly improved stock turn, higher productivity at the scours, much improved cash flow and lower borrowings which after refinancing are less expensive and more secure," the company said. The stock was last unchanged at 32 cents.

Pyne Gould Corp. (PGC): The financial services company announced that its vehicle finance subsidiary Marac Finance had secured the rights to promote Holden Financial Services, Holden Finance and Holden Insurance. The deal builds on Marac's recent acquisition of GMAC NZ's (GMAC) retail motor vehicle book. Shares were unchanged yesterday at 43 cents.

Tourism Holdings (THL): The campervan rental company said one of its two Christchurch sites was damaged by the earthquake. Its second-hand motorhome outlet has been closed and a temporary site set up in with vehicles relocated to that site. The shares were unchanged yesterday at 80 cents.

Themes of the day: The New Zealand dollar rose against the US currency overnight as better-than-expected economic data from America helped raise the appetite for riskier currencies. The kiwi was last trading at 72.28 to the greenback, up from 72.13 yesterday. European stocks advanced overnight amid further signs that the global economic recovery was on track, with the Stoxx Europe 600 Index advanced 0.2% to 260.94. US markets open today after being closed for the Labor Day holiday.

Businesswire.co.nz

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