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Stocks to Watch: Profits fall at Contact, Pumpkin Patch

24 Feb 2009 10:39businesswire

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.  Themes of the day: Contact Energy, the biggest energy company on the NZX 50, posted a slump in first-half profit. Stocks on Wall Street fell led by tech companies such as Intel Inc. and Hewlett-Packard amid fears the world’s largest economy faces a prolonged recession. U.S. regulators hosed down reports that the nationalization of Citigroup was imminent, while pledging more aid for troubled banks.

Contact Energy Ltd. (CEN): The largest utility on the NZX 50 posted a 79% slump in first half profits, attributing most of the blame to constraints on the Cook Strait cable. Its stock sank 0.8% to NZ$6.05 yesterday.

Nuplex Industries (NPX): The maker of specialty chemicals and resins tumbled 14% to NZ$1.25 yesterday, leading the NZX 50 lower as investors await news on its talks with banks to ease the requirements of its senior debt cover ratio requirements.

NZX Ltd. (NZX): The operator of the stock exchange, fell 3.6% to NZ$5.40 yesterday after posting a 17% gain in first-half profit on cost cutting and an increase in sales of information services. Chief executive Mark Weldon said the profit was achieved in “extremely difficult trading conditions.”

PGG Wrightson (PGW): The nation’s biggest rural services company gained 10% to 65 cents, leading the index higher and clawing back some ground after tumbling 28% on Friday amid concern its balance sheet is weakening at a time it may need funds to repay debt and meet legal costs.

Pumkin Patch Ltd. (PPL): The maker of children’s wear reported a 7% fall in net profit after tax to NZ$9.5 million, with the company citing a poor performance by its U.S. stores as dragging down the bottom line. Sales increased 3% to NZ$211.2 million. Its shares rose 3.8% yesterday to 83 N.Z. cents.

Turners Auctions Ltd. (TUA): The car auctioneer yesterday reported a 53% drop in full-year profit to NZ$1.1 million, reflecting “extreme changes in the car market through 2008.” Turners said the New Zealand used car market has seen “unprecedented decline over the last 12 months resulting in substantial consolidation and withdrawals of dealer and finance organisations.” Still, net cash inflows from operating activities rose to NZ$9.4 million from NZ$3.2 million in 2007 and it will pay a final dividend of 0.4 cents per share and a special dividend of 4.6 cents. The shares traded unchanged at 50 cents yesterday.

TrustPower Ltd. (TPW): In a briefing to investors, the utility controlled by Infratil Ltd., is expecting retail sales to continue increasing, albeit at a more modest rate as the country moves to carbon pricing. Flat demand through the economic downturn may see investment decisions postponed. The company’s stock fell 0.3% to NZ$7.15 yesterday.

Sky City Entertainment (SKC): The Auckland-based casino and hotel operator posted a first-half profit of NZ$55.6 million, excluding one-time items, down from NZ$64.2 million a year earlier. The company will prune back its distribution payout ratio to 60% to 70% to retain capital to repay debt, it said. The shares were unchanged yesterday at NZ$2.72.



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