MARKET CLOSE: NZ shares rise as Nuplex flags sale, Kathmandu gains
By Suze Metherell
Sept. 24 (BusinessDesk) - New Zealand shares rose, led by Nuplex Industries after it flagged a possible sale of two
Australasian businesses. Kathmandu Holdings paced the gain, recovering from a decline after reporting weaker annual
earnings yesterday.
The NZX 50 Index rose 16.729 points, or 0.3 percent, to 5258.172. Within the index, 20 stocks rose, 20 fell and 10 were
unchanged. Turnover was $133.6 million.
Nuplex climbed 6.6 percent to a three-month high $3.22 after the chemicals manufacturer confirmed it's in talks with
CHAMP Private Equity with a view to selling its Australasian agency and distribution business, Nuplex Specialties and
the plastic additives business, Nuplex Masterbatch.
"Australia has been a deteriorating performer," said Rickey Ward, New Zealand equity manager at JB Were. Chief executive
Emery Severin "had attracted the label as someone who wanted to go and acquire businesses and this is doing the opposite
to that.
"This is the decision that that company is wanting to entertain someone who is looking to acquire some of their
business, so it is more of a divestment of non-performing or poor-performing assets."
Kathmandu rose 3.2 percent to $3.20, more than making up from yesterday's 1.6 percent decline. The outdoor goods
retailer reported a 5.4 percent fall in annual profit to $42.2 million, in line with guidance given, as a slow start to
winter crimped sales.
The Christchurch-based company plans to invest $5 million to expand its business in the UK and Europe this financial
year, in the first phase of a three-year strategy to build its global brand, which may dent earnings growth. Retailers,
particularly those in the rag-trade, have come under increasing pressure from offshore, online retailers.
"It’s the one retailer that is doing particularly well," Wards said. "That's the one retailer that seems to be able to
manoeuver its way through challenging times."
Listed electricity generator-retailers continued to gain on optimism after the general election delivered Prime Minister
John Key and his government a third term, and the potential to govern alone shutting down the threat of more regulation,
which had been a cornerstone policy for opposition parties in trying to drag down power prices for consumers.
Genesis Energy climbed for a fifth day, rising 2 percent to $2.03. Meridian Energy advanced 0.7 percent to $1.55.
"Utility stocks generally have a firmer feel to them," Ward said. "The market would now suggest it’s a dead duck, for
want of a better word, that was this year's policy and the left didn't get elected, so it is impossible to implement in
the near term and it is yesterday's story."
Infratil, which has a majority share in TrustPower, edged up 0.4 percent to $2.80, after 8.5 million of its shares, or
1.5 percent of the company, changed hands in a single trade, its biggest trade since January coincided with the price
hovering above a six-year high.
Fletcher Building, New Zealand's largest listed company, fell 1.5 percent, or 13 cents, to $8.78 after shedding rights
to its final 18 cents per share dividend, payable on Oct. 15. It announced today that it will close its unprofitable
Crane copper tube manufacturing business in Australia amid increased competition.
The building company acquired the business when it took over the publicly listed Australian plumbing supply chain and
plastic piping company Crane Group in early 2011 in a deal valued at $1.2 billion. Exiting the business will result in a
$19 million expense in the current financial year ending June 30, 2015, the Auckland-based company said in a statement
today.
Spark New Zealand, formerly Telecom Corp, fell 2 percent, or 6 cents, to $2.97 after shedding rights to its final 9
cents per share dividend.
Units in Fonterra Shareholders' Fund were unchanged at $6.29 after Fonterra Cooperative Group, the world's biggest dairy
exporter, cut its forecast 2015 milk price payout by about 12 percent to $5.30 per kilogram of milk solids from a
previous forecast of $6/kgMS, citing weaker global dairy prices. It lifted its forecast dividend payment to a range of
25-35 cents a share, from a previous projection of 20-25 cents. Annual net profit tumbled 76 percent to $179 million,
which Fonterra attributed to "constrained margins" in its food service, consumer businesses and non-milk powder
products. Units in the fund give holders access to the company's dividend stream.
Chorus rose 0.8 percent to $1.80. The telecommunications network operator will ask shareholders to hike the pool for
directors' fees 12 percent to $1.1 million if it needs to bolster its board as it tries to limit the impact of
regulation on its revenue streams.
Outside the benchmark index, Comvita increased 1.4 percent to $3.70. The Te Puke-based company, which produces health
products derived from manuka honey, sees annual earnings growth of up to 32 percent, to between $9 million and $10
million. It expected profit to come from the second half, due to uneven sales between the northern and southern
hemispheres, and after the honey harvest is collected between January and May next year, which will generate revenue
from the beekeeping operations.
Michael Hill International, the Brisbane-based jeweller, rose 0.8 percent, or 1 cent, to $1.29, after it shed rights to
its final 4 cents dividend, payable Oct. 3.
(BusinessDesk)