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Stocks to watch: Turners, Allied Farmers, Cavalier, SKT, TEL, CEN

Monday 22nd February 2010

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Turners Auctions shares soar 16% on full year profit tripling, Allied Farmers tumbles as NZX confirms it is out of the NZX 50 and Cavalier posts a 6% decline in first-half earnings.  This week is the final peak week for earnings, with Pike River Coal, PGG Wrightson, Nuplex Industries and Guinness Peat Group among those still to report.

Turners Auctions (NZX: TUA ): The shares soared 16% to $1.45 on Friday after New Zealand’s largest single seller of motor vehicles tripled its full-year profit after reducing purchases of used vehicles in Japan, allowing costs to fall more than revenue.

Allied Farmers (NZXALF): The rural services and finance group that took on Hanover Finance’s loan book on Friday said NZX had reversed its position on the stock entering the benchmark index. The NZX had told market participants this week that it would join and some investors had bought shares in anticipation. The shares tumbled 11% to 11 cents on Friday.

Cavalier Corp. (NZX: CAV ): The carpet maker posted a 6% decline in first-half earnings to $7 million and lifted its full-year forecast to a range of $14.5 million and $15.5 million, from a previous estimate of $13.5 million to $15.5 million. Adverse market conditions for carpets “have bottomed out” and the company is cautiously optimistic for a gradual rise in revenue. On Friday the stock climbed about 2% to $2.58.

Sky Network Television (NZX: SKT ): New Zealand's dominant pay-TV provider on Friday posted a 19% gain in first-half profit as growth in MYSKY HDi subscribers caught up with costs and the company paid less interest. Full-year profit would be in a range of $88 million to $104 million, from $88 million in 2009, it said. On Friday, the shares rose 1.9% to $4.80.

Telecom (NZX: TEL ): The Commerce Commission today said it has accepted undertakings by Telecom and rival Vodafone on mobile termination rates and won't impose regulation on the two biggest players in the market. Telecom shares were unchanged on Friday at $2.34.

Charlie’s Group (NZX: CHA ): The juicemaker set up by Stefan’s Orange Juice founder Stefan Lepionka and entertainer Mark Ellis on Friday said it was abandoning plans to raise more capital because a return to profitability has taken the pressure off its balance sheet.  The shares rose 3.2% to 9.6 cents.

Contact Energy (NZX: CEN ): The company has announced a joint venture with a Rotorua Maori incorporation, Taheke C8, to appraise a geothermal steamfield on the shores of Lake Rotoiti.  Detailed assessment of the resource is planned over the next two years. Contact is due to announce its first-half profit tomorrow, and has resisted giving guidance owing to volatile wholesale trading conditions and heavy retail competition. The utility may post a 27% jump in first-half profit, recovering from a year-earlier period when national grid constraints and limits on the Cook Strait cable stymied trading. The stock rose 0.9% to $5.70 on Friday.

Freightways (NZX: FRE ): The company is rated ‘market perform’ by ASB Securities analyst Florian Burch, according to the ShareChat website. Its first-half results show early signs of a turnaround in parts of the express package business while the information management operations proved resilient but the market was disappointed. The shares fell 2 cents to $3.01 on Friday.

Lyttelton Port Co. (NZX: LPC ): The South Island’s largest port company said it will extend talks with Port of Otago over a possible operational merger, while saying it is ultimately in the hands of their shareholders and the regulator whether it can fly. Though both companies are “treating this project with the utmost of urgency,” they said in a statement. The shares traded unchanged on Friday at $2.45.  

Property for Industry (NZX: PFI ): The property investment company today said operating profit for distribution rose 1.4% to $15.9 million. On Friday the shares dropped 1.7% to $1.13.


Economic themes of the day: US stocks rose on Friday in New York, with the S&P 500 climbing 0.2% on optimism the Federal Reserve decision to raise its discount rate is a sign the financial system is recovering. The kiwi dollar ended up holding below 70 US cents in New York trading on Friday.

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