Stocks to Watch: F&P Appliances funding, Warehouse outlook

Monday 20th April 2009

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

Themes of the day: Stocks on Wall Street rose on Friday, extending the Standard & Poor’s 500 Index’s rally for a sixth week better-than-expected earnings from Citigroup and General Electric stoked optimism the economic slump may be abating. The New Zealand dollar fell to 56.70 US cents, the lowest since April 1.

Cooks Food Group Limited (CFG): The NZAX-listed food company has agreed to sell its businesses to Hutchinsons, part of the Australian food distribution group that trades as Manassen Foods and was capitalized with help from CHAMP Private Equity. Hutchinsons will also gain the right to complete the purchase of the Diamond and DYC brands from Goodman Fielder. The shares last traded on January 26 at 25 cents.

Fisher & Paykel Appliances (FPA): The appliance manufacturer’s NZ$80 million short-term loan-facility ends on April 30, increase the prospects for the company to announce new capital-raising initiatives. It gained a waiver to its debt cover ratio and interest cover ratio covenants for the term of the interim facility, buying
more time to negotiate with its banking syndicate to refinance bank debt. Total debt was expected to reach about $570 million as at March 31. The shares have tumbled 65% this year and were last at 47 cents.

Orion Minerals Group (OMG): The company that owns a iron ore mining concession in Chile said it received the US$8 million it was awaiting from Hong Kong’s Fengli Group, completing the US$12.5 million equity raising. The funds raised will allow OMG to finalise its operational plans and commence operations, it said in a statement today. The company had initially expected to start shipping iron ore in the third quarter but will now delay the start due to “the unprecedented and unexpected reductions in the level and pricing of the global iron ore trade.” The shares last traded on March 17 at 24 cents.

Plus SMS Holdings (PLS): The provider of mobile messaging systems plans to raise as much as $626,084 through the issue of 125 million shares at $0.005 per share. That’s a 62% discount to the trading price during the 30 trading days ended March 24, it said. The funds will give the company more working capital. Company directors will be taking up their full entitlement, Plus SMS said. The shares have fallen almost 30% in the past month and were last at $0.005.

Tourism Holdings (THL): Profits for tourist operators fell 5% over the past three months as demand declined, according to the Tourism Industry Monitor survey. Demand may worsen in the three months through June, according to the survey. The shares were at 47 cents on Friday and have dropped 30% this year.

Warehouse Group (WHS): The outlook for retailing will remain “challenging” so long as consumer confidence remains weak and unemployment rises, the company said in its first-half report. Adjusted net profit this year will be “similar” to last year. The retailer says it is in a “very strong” financial position, having reduced net debt to $76 million at the end of January, from $115 million a year earlier. The shares rose 9 cents to $3.54 on Friday and are little changed this year.

Businesswire.co.nz

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