Yovich & Co Weekly Update - 2 December 2013

Dec 2, 2013 | Commentary

This Week’s Themes

  • The Australasian markets continued their slide as we head into December.
  • The local market ended what was the weakest monthly performance of the year with a 2.3% drop.
  • U.S markets stretched record levels further which is surprising given the Thanksgiving break and disappointing home sales data.
  • U.S. equity strength translated into strength of the U.S. Dollar as markets closed for the long weekend and the Kiwi to Aussie cross rate was steady.

Company Results Review

Ryman (RYM.nz) – Profit for September half year was up 22% at $58.5m.  Company is on track to achieve its medium term target of growing underlying profit by 15% per annum.  Melbourne presales of 48 apartments are well ahead of target and it is now seeking a second site in Melbourne.  Interim dividend is 5.6c and is payable 13 December.  Current price is $7.60 and 12 month target price is $8.20.

AWF Group (AWF.nz) – Profit is down 51% at $1.9m for September half year.

Mainfreight (MFT.nz) – Half year profit was $41.8m compared with $27.7m last year.  It includes a $12.74m one off gain from a settlement pay out.  A stronger second half result is expected.  Current price is $11.75 and 12 month target is $12.75.  Gross dividend yield is 3.4%.

Hallenstein (HLG.nz) – First half profit guidance is $8m compared with $10.4m last year.

F & P Healthcare (FPH.nz) – Had a strong first half with profits up 34% at $44.5m.  Profit for the March year is expected to be $90m to $95m.  Gross dividend yield is 4.82%.  Current price is $3.58 and target price is $3.73.

Z-Energy (ZEL.nz) – Profit for September half year was $55.5m compared with $24.9m last year and it has paid its first dividend of 7.7c fully imputed.

Moa Group (MOA.nz) – Expects to post a loss of between $5m and $6m for March 2014 year which is double its prospectus forecast of $2.5m.

Pumpkin Patch (PPL.nz) – Has issued a profit warning downgrading market expectations for 2014 earnings.

Xero (XRO.nz) – Loss for September half year was $10m higher at $17.1m.

Sanford (SAN.nz) – Profit for September year was $20.4m compared with $19.66m last year.  Gross dividend yield is 6.98%.  Current price is $4.55 and target price is $5.00.

Smartpay (SPY.nz) – Profit for September half year was $884,000 a major turnaround on last year’s loss of $2.396m.

Comvita (CVT.nz) – Loss for September half year is $800,000 compared with profit of $2.4m last year.

Cavalier (CAV.nz) – Is forecasting profit for June 2014 year of between $8m and $10m compared with $6.6m for 2013.  Current price is $1.69 and target price is $1.94.  Gross dividend yield is 8.18%.

Trustpower (TPW.nz) – TrustPower has won a dispute with Inland Revenue over deductibility of $17.7m costs arising from the feasibility of removable generation projections.  Gross dividend yield is 8%.  Current price is $6.60 and target price is $7.80.  The profit for September half year was up 11% at $77.2m.

Turners Auctions (TUA.nz) – Expects annual profit to rise around 10% after improved trading in second half.  Current price is $2.46 and gross dividend yield 8.47%.

Acurity Health (ACY.nz) – Profit for September half year was up 19.4% at $3.41m.  In addition there were non cash revaluations of interest rate swaps of $650,000.  Gross dividend yield is 4.02%.  Current price is $5.20 and target price is $5.60.

Auckland Airport (AIA.nz) – Is to return $454m of Capital to its shareholders by cancelling 1 in 10 shares with each shareholder receiving $3.43 per share.  A portion of the Capital returned will be treated as a dividend for tax purposes with imputation credits attached. The return of Capital is expected in mid April following Court approval.

Sheffield Resources (SFX.asx) – Was awarded the “Best Emerging Company” at the Diggers and Dealers Mining Forum and the Explorer of the year at the 2013 Australian Mining Prospect Awards.  Sheffield has announced high grade drill results from its world class Thunderbird heavy mineral sand deposit near Derby in the Canning Basin region and it has commenced its second stage drilling at its Red Bull Nickel Copper Project.

Snakk Media (SNK.nz) – Has been named the sixth fastest growing business in New Zealand on the Deloitte Fast 50 Index.  Sales for the half year increased from $1.22m to $3m but losses increased from $723,820 to $837,652 due to doubling of operating and staff costs.

Methven (MVN.nz) – Profit for September half has increased from $2.3m to $2.8m and expects improved performance to continue for remainder of the year.  A 5c dividend is being paid on 31 December up from 4.5c last year.

Jasons Travel Media (JTM.nz) – Financial position continues to deteriorate and it is to be placed in receivership.

Abano Healthcare (ABA.nz) – Fell 82c on Friday to $6.38 after announcement that takeover offer was withdrawn.

Chorus (CNU.nz) – Has had a difficult week after the Government’s failure to obtain sufficient support to legislate to override Commerce Commissions recommendations to cut wholesale broadband prices.  It is taking the Commission to Court over whether the regulator applied the law correctly in making cuts to wholesale broadband prices.  It has also formally applied for the Commission to review its own decisions on these prices.

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Jarrod Goodall

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