Stocks to watch: Abano, NZ Farming Systems, Pike River

Wednesday 29th July 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: US consumer confidence slipped in July, weighing on Wall Street and the price of crude oil. In New Zealand, building consents for June are due for release at 10:45am in Wellington, which may show a flatter month after a jump in apartments stoked the May numbers. National Bank’s Business Outlook report is also out today. The kiwi dollar bought 65.79 US cents.

Abano Healthcare (ABA): The stock edged up 0.8% to $5.35 yesterday, when the health-care clinic investor reported that net profit jumped 24% to $9.7 million in the 12 months through May. The stock has gained 18% in the past three months.

AMP NZ Office Trust (APT): The commercial office property has secured lease renewals with eight tenants in the past eight weeks covering more than 23,000 sqm of space across 25 floors in properties in Auckland and Wellington. The tenants provide a total $7.9 million in rentals each year. The trust’s units were unchanged at 77 cents yesterday.

Methven (MVN): The tapware and bathroom fixtures company dropped 7.8% to NZ$1.31 yesterday, the biggest decline on the NZX 50, after forecasting a drop in 2010m profit of as much as 20% because of worsening trading conditions in the UK. “No one expects 2009-10 to be easy with extremely challenging trading conditions in all markets, but we are fit to compete,” said chief executive Rick Fala.

NZ Farming Systems Uruguay (NZS): The developer of dairy farms in South America raised US$30 million selling Uruguayan bonds, giving the company long-term financing to expand. The bonds will be issued on July 31, at an average price of 99.28% of face value, it said. The shares fell 1 cent to 45 cents yesterday.

Pike River Coal (PRC): The coal miner’s announcement of a six-week delay to mid-November for its first sales of the fuel is disappointing, according to Forsyth Barr analyst Andrew Harvey-Green, the ShareChat website reported. The delay narrows the margin of time Pike has to ensure it meets a covenant of its loan terms with Liberty Harbour of having average monthly production of 66,667 tonnes by November 30. “Any further delay will require Pike River to seek additional capital and renegotiate the loan terms with Liberty Harbour," said Harvey-Green, who rates the stock a ‘hold.’ Liberty Harbour extracted a 400 basis point penalty for missed production targets following the ventilation shaft collapse, according to the report. The shares rose 0.9% to $1.13 yesetrday.

ProvencoCadmus (PVO): The provider of electronic point-of-sale systems said it is seeking expressions of interest from potential investors in the lead up to a capital restructure. The complexity of the changes and weaker than forecast trading performance during May - July period “has placed significant pressure on the resources of the business,” it said. Additional funding “is urgently required in order to support working capital need” and the company is in talks with its bank and existing shareholders to gain short-term aid. The stock tumbled 37% to 4.1 cents yesterday.

Businesswire.co.nz

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