Stocks to watch: FPH, Northland Port, Farming Systems

Monday 30th August 2010

Fisher & Paykel Healthcare is expecting no earnings growth over the next year, Northland Port posted a 16% rise in profit for the year to June and NZ Farming Systems shares dropped as Olam increased its takeover offer and rival bidder Union Agricultural took its bid off the table.

Fisher & Paykel Healthcare (FPH): The maker of breathing masks and respirators said it expects no earnings growth this year, reflecting a strong kiwi dollar. FPH chief executive, Mike Daniell, told shareholders at the NZX star's annual general meeting on Friday that earnings will gain 10% "in constant currency terms". Its shares last traded at $2.81.

Northland Port (NTH): The port and infrastructure investment holding company last week posted a 16% rise in net profit for the year to June 30, on the back of improved log volumes at the port of Marsden Point. Its shares last traded early last week at $1.70 each.

NZ Farming Systems Uruguay (NZS): The South American dairy operator dropped 4.2% to 69 cents after Olam International raised its takeover offer to 70 cents. Rival bidder Union Agricultural Group took its 60 cents a share offer off the table, saying "the opportunity does not look so good for us at that price". Its shares last traded at 69 cents.

Sky City Entertainment Group (SKC): The listed casino operator is in negotiations with the South Australian government to invest up to $250 million to enhance its Adelaide Casino. Other development work on the city's Riverbank area aims to transform its waterfront into a "world class entertainment precinct," said David Christian, general manager Adelaide Casino. Its shares last traded at $2.91.

Sky Network Television (SKT): The pay television provider could have a cashflow surplus of about $190 million by 2014 and is in danger of being underleveraged and have an inefficient balance sheet First NZ Capital analyst Sarndra Urlich said in ShareChat. Sky could increase its dividend payout ratio, pay out a special dividend or even undertake a share buyback she said. Without engineering a more efficient balance sheet, the TV company could become a very attractive corporate target. Its shares last traded at $5.

Telecom (TEL): The national telecommunications provider may lose its chief executive Paul Reynolds if the company is split in two according to its chairman Wayne Boyd, quoted in The DominionPost. Reynolds said he was utterly focused on leading Telecom through its transformation to two new companies, one in retail and one a network company, and that "any speculation about another job for me is just that - speculation." Its shares fell 2 cents to $2 on Friday.

Themes of the day: South Canterbury Finance is facing a Tuesday deadline to find a new investor or wave the white flag. Chief executive CEO Sandy Maier said yesterday that three private bidders are seeking to invest in the firm.

Shares rose on Wall Street on Friday and Federal Reserve chairman Ben Bernanke said the central bank would look at new ways to ease policy as global recovery falters. Japanese finance minister Yoshihiko Noda said the government will take "decisive" action to rein in the yen, stoking speculation the Bank of Japan stands ready to intervene in currency markets.

New Zealand releases its July trade balance today, building consents for July come out tomorrow. The kiwi rose one cent overnight to 71.41 US cents from 70.42.

Businesswire.co.nz

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