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Stocks to watch: Telecom's former CEO speaks out, RBD boosts guidance, PGC

Friday 5th March 2010

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Telecom's former CEO speaks out on generous remuneration, Restaurant Brands shares climb on  boosted guidance and SmartPay expects an underlying profit this year. Tourism Holdings climbed for a second day yesterday after having announced that shareholders have been targeted by an Australian buyer.

Telecom (NZX: TEL ): Former chief executive Theresa Gattung has hit out at the level executive salaries at the country's largest phone company, questioning what they have done to deserve such generous remuneration. In an interview with the Dominion Post newspaper to market her upcoming book, she savaged former Communications Minister David Cunliffe for blindsiding the company over its plans to force an operational separation, and blamed politicians for much of the company's current woes. The shares gained 2.3% to $2.26 in trading yesterday.

Restaurant Brands (NZX: RBD ): The franchise holder for KFC, Pizza Hut and Starbucks outlets, climbed 8.8% to $1.98 yesterday. Full-year profit excluding non trading items was about $19.5 million, beating the company's November 30 forecast of $17.5 million on KFC sales and a renegotiated supplier contract.  "They are doing a lot of the basics right," said Craig Brown, who helps manage $3.3 billion at ING New Zealand.

Hellaby Holdings (NZX: HBY ): The diversified investment group is rated 'accumulate' by John Cairns, an analyst at Forsyth Barr, according to the ShareChat website.The company is dealing with a difficult operating environment in all four operating divisions, automotive, equipment, footwear and packaging, Cairns said, according to the report. The company's decision to paya first-half dividend of 3 cents was "an encouraging move." The shares were unchanged at $1.70 yesterday.

Pyne Gould (NZX: PGC ): The parent of bank-aspirant Marac Finance is prepared to renew its $75 million facility with embattled lender South Canterbury Finance, the Press newspaper reported. Cornerstone shareholder George Kerr said he would like to extend the facility, and that the restructuring strategy led by new chief executive Sandy Maier was on the right track. The shares rose 1 cent to 45 cents in trading on the NZX yesterday.

SmartPay (NZX: SPY ): The EFTPOS company that acquired assets from the failed ProvencoCadmus group yesterday announced it expects to make an underlying profit this year and is working through its existing debt facilities as it prepares to expand. EBITDA will be $1.5 million to $2 million in the 12 months through March, compared to a loss of $2.5 million a year earlier. The shares rose 5% to 4 cents yesterday.

Tourism Holdings (NZX: THL ): The campervan operator climbed for a second day yesterday after saying it became aware of an unsolicited proposal by a person in Australia to some shareholders seeking an option to buy their shares.  The shares rose 1.1% to 96 cents yesterday.

Economic themes of the day: Stocks on Wall Street edged up amid mixed data with fewer jobless claims last month, but a slump in pending home sales.

The outlook for Greece continued to improve after it received strong demand for a 5 billion euro 10-year bond, while the European Central Bank and Bank of England kept their benchmark interest rates on hold.

The greenback gained on speculation the Fed may be closer to hiking interest rates, and the kiwi dollar dropped to 68.52 US cents amid the widening divergence between the trans-Tasman economies.

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