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Stocks to watch: Abano, Delegat's, PRC, SKC, XRO, GFF, KIP

Thursday 1st April 2010

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Abano trims full-year profit guidance as ACC referrals drop and Delegat's Group predicts profit in 2010 will fall. Pike River is well-placed to benefit from the current coking coal prices and Sky City Entertainment's credit rating outlook is raised to positive by S&P.

Abano Healthcare Group (NZX: ABA ): The investor in specialist medical clinics said second-half earnings will be “softer than planned” because of a drop in ACC referrals and a temporary slowdown in Australian Audiology. The company will maintain its annual dividend payment at 21 cents. The stock fell 1.9% to $5.30 yesterday.

Delegat’s Group  (NZX: DGL ): The maker of Oyster Bay wines said it sees the current challenging business environment prevailing “through the remainder of the 2010 reporting year.” Lower grape prices will likely result in “a fairly significant negative impact on reported performance,” the company said in its interim report. Profit in 2010 is likely to drop 30 – 40% from 2009. The stock fell 3.1% to $1.88 yesterday. 

Pike River Coal (NZX: PRC ): Chief executive Geoff Ward said the miner's first export shipment coincides with "a buoyant and encouraging international market in which world coking coal prices are expected to rise higher than previously forecast." In the company's interim repoprt he notes that BHP Billiton was this month reported to have agreed hard coking coal prices for the April-June 2010 quarter with its Japanese customers at US$200 per tonne. "Pike River is well-placed to benefit from the current international demand," he said. The stock was at 92 cents yesterday.

Sky City Entertainment Group (NZX: SKC ): Standard & Poor's yesterday raised the outlook on the BBB- credit rating of New Zealand's biggest casino company to ‘positive' from ‘stable,' reflecting its more conservative approach to credit risks. S&P credit analyst Jennifer Wee said equity raising and the sale of its cinema business "have significantly improved the group's balance sheet and debt profile." The stock gained 0.6% to $3.22 yesterday.

Xero  (NZX: XRO ): The online accounting services company said operating revenue will triple to more than $3 million this year. Paying customers have grown to more than 17,000 from 6,000 a year ago, it said in an operating update. The shares rose 6 cents to $1.65 yesterday.

Goodman Fielder (NZX: GFF ): The Australian food ingredients and baking group said it is disappointed that the Australian Competition and Consumer Commission has opposed the sale of its commercial edible fats and oils division to Cargill Australia. Managing director Peter Margin said if it fails to address issues raised by the ACCC it would “retain ownership of the business and proceed to develop and substantially restructure its operations to improve profitability.” The shares traded at $1.95 yesterday. 

Goodman Property Trust (NZX: GMT ): An independent valuation of the Trust’s property portfolio at March 31 resulted in a 1.9% reduction to $1.5 billion, the trust’s manager said today. The reduction was “principally attributable to a reduction in the carrying value of the development land portfolio.” Yesterday, the stock slipped 1% to $1.

Kiwi Income Property Trust (NZX: KIP ): The value of the trust’s total portfolio by 3.9% to $1.85 billion for the financial year ended March 31. The decline partly reflects a reduction of about $8.7 million, or 0.5% in the value of its portfolio of prime office and retail assets in the past six months. “Property values are stabilising consistent with recent improvements in global economic conditions,” said Sean Wareing, chairman of the trust’s manager. The decline in the value of office properties has been offset by an increase in the value of retail properties, he said. The shares were unchanged yesterday at $1.


Economic themes of the day: The NZX 50 Index ended the first quarter at about the same level as it started and was little changed, having dipped then recovered.

The Kiwi dollar fell 2.2% against the greenback in the same period.

Shares fell on Wall Street, with the Dow Jones Industrial Average falling 0.5% to 10856.63 after a report from ADP Employer Services showed private employers unexpectedly shed 23,000 jobs last month and February's tally was revised to a bigger decline. The report comes before non-farm payrolls this Friday in the US, a public holiday, and may point to a weaker jobs report.

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