MARKET CLOSE NZ shares fall as F and P Healthcare guidance dissected, Pumpkin Patch gains

New Zealand shares fell, paced by Fisher & Paykel Healthcare on concern its earnings guidance is tied to the fortunes of the kiwi dollar and doesn't show enough revenue growth relative to it the stock's valuation. Pumpkin Patch gained on small volume after the retailer named a new chief executive.

The NZX 50 Index declined 3.644 points, or 0.1 percent, to 4542.025. Within the index, 26 stocks fell, 16 rose and eight were unchanged. Turnover was $92.7 million.

F&P Healthcare, which gets more than 50 percent of its sales in US dollars, fell 1.4 percent to $3.52. The company said it expects full-year operating revenue of $625 million to $645 million, up from its May forecast of $610 million to $630 million. The forecasts assume a kiwi dollar of about 80 US cents, while in May it was an 80-85 US cent range.

"If you strip down the result over half the result is due to favourable hedging and that's a temporary measure," said James Smalley, client adviser at Hamilton Hindin Greene.

New Zealand Oil & Gas fell 0.6 percent to 83.5 cents after the energy explorer boosted annual profit 31 percent to $25.9 million after a year earlier impairment charge on loans to Pike River Coal rolled off. The company plans to use its cash buffer as it hunts for more oil to replace declining output at its Tui and Kupe fields.

Pumpkin Patch, the children's clothing retailer, climbed 3.4 percent to 92 cents with 54,000 shares changing hands, after announcing that merchandise and brand director Di Humphries has been appointed chief executive, effective immediately. Chair Jane Freeman said Humphries was an "extremely strong" internal candidate who the board couldn't ignore, and who has had a "huge impact" since joining the company last year.

Hamilton Hindin Greene's Smalley said the key for investors, "regardless of who the CEO is, is to be continually getting your debt levels down."

Fletcher Building gained 0.6 percent to $8.70 after the biggest company on the stock exchange temporarily closed a plasterboard factory of its subsidiary Winstone Wallboards in Christchurch after finding asbestos. The plant is expected to re-open on Wednesday, and may delay deliveries to South Island customers by up to two days.

Fonterra Shareholders' Fund edged up 0.2 percent to $6.87 after the world's biggest dairy exporter lifted its forecast payout to farmers in the 2014 season by 30 cents to $7.80 per kilogram of milk solids on the strength of international dairy prices.

Smalley said the payment to farmers was a cost to the business so wasn't necessarily good news for unit holders even though it implies very good demand for dairy products in general.

Wellington Drive Technologies climbed 3.9 percent to 13.5 cents after the unprofitable manufacturer of energy efficient motors narrowed its first-half loss to $1.76 million as its turnaround plan started stripping out costs.

Among companies reporting tomorrow, state-controlled power company MightyRiverPower rose 0.5 percent to $2.19, retail search engine designer SLI Systems climbed 4.8 percent to $2.19, and Veritas Investments, which was the vehicle for the backdoor listing of the Mad Butcher franchise, fell 1.4 percent to $1.40.

(BusinessDesk)