MARKET CLOSE: NZ stocks rise as Fletcher Building returns to profit

Wednesday 18th August 2010

New Zealand stocks rose for the third time in four sessions as Fletcher Building returned to profit and raised its dividend, leading gains on the day.

The NZX 50 rose 11.6 points, or 0.4%, to 3018.1. Within the index 21 stocks rose, 14 fell and 15 remained unchanged. Turnover was $78.4 million.

Share in Fletcher Building (NZX: FBU ) rose 2.2% to $7.34, rising from a 12-month low, after it reported a full-year profit of $272 million, from a year-earlier loss. The company also said it will pay a final dividend of 15 cents a share, up from 14 cents a year earlier, though it couldn’t provide any meaningful guidance on its future earnings due to uncertainty in the market.

“Fletcher was hit pretty hard ahead of the results - I think people drew a line from Freightways’ comments and retail numbers and thought the balance can only be in line with forecasts or worse and just threw the baby out with the bathwater,” said David Price, an analyst with Forsyth Barr. “With the results coming in line with expectations, we’ve seen the shares claw some of that ground back.”

Freightways (NZX: FRE ) rose 2.1% to $2.87, Rakon (NZX: RAK ) rose 1.9% to $1.07 and Air New Zealand (NZX: AIR ) rose 1.7% to $1.17.

Telecom (NZX: TEL ) rose 0.5% to $2.08, with the incumbent operator mulls splitting its business to tap government money and shrug off existing regulatory burdens. The Telecommunications Carriers’ Forum, an industry group, called for public submissions on its draft standards for the project. The standards are a major milestone for the government’s internet backbone, as they provide a clear direction on how it will operate.

Shares in Affco (NZX: AFF ) were unchanged at 37 cents, after the company recommended shareholders reject a 37 cents-a-share takeover offer from South Island food producer Talleys Group, saying the current offer price did not reflect the true value of the company.

The offer comes after Toocooya Nominees, controlled by the Spencer family, agreed to sell its 23.5% stake to Talleys. The deal takes Talleys total shareholding in Affco to 76.3%, and has triggered an automatic offer for all outstanding shares under the Takeovers Code.

NZX (NZX: NZX ) was unchanged at $1.41, the lowest level since its share split in December, after it reported flat earnings of $5.7 million for the six months to June 30, once one-off gains from asset sales in the previous period are stripped out.

Briscoes (NZX: BRG ) rose 5.4% to $1.81. The company had earlier posted a 2% decline in same-store sales in the three months ended Aug. 1 was its first quarterly decline since early 2009.

Leading declines on the NZX 50, APN News & Media (NZX: APN ), which publishes the NZ Herald and operates the Radio Network, fell 7.5% to $2.32 on the NZX and was last trading 8.8% down at A$1.87 on the ASX after the media company reported a net profit of A$39 million in the six months ended June 30 from A$37.2 million a year earlier.

Westpac Banking Corp., the dual-listed lender, fell 3.6% to $28.90, Hallenstein Glasson Holdings, the clothes retailer, fell 2.5% to $3.85 and Property for Industry Ltd., the commercial property investor, fell 1.8% to $1.12.

NZ Farming Systems (NZX: NZS ) fell 1.6% to $63 cents. The takeover target yesterday announced that it has bought its management contract for $4 million from outgoing shareholder, PGG Wrightson (NZX: PGW ). The deal, which is subject to bank and bondholder agreement and any shareholder approval, will leave Wrightson as preferred supplier until at least 2019 and the rural services company will provide Farming Systems with advice and consultation until 2015.

Businesswire.co.nz

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