Market close: Shares fall, paced by Kathmandu, Pumpkin Patch

BUSINESSDESK: New Zealand shares declined, led by Kathmandu after the outdoor clothing and equipment retailer posted a decline in full year earnings. Heartland New Zealand, Xero and Cavalier paced the gains.

The NZX 50 Index fell 9.7 points, or 0.25%, to 3809.57. Within the index, 25 shares fell, 16 rose and nine were unchanged. Turnover was $114 million.

Shares in Kathmandu fell 6.3% to $1.64. The Christchurch-based company posted an 11% decline in full-year profits to $34.9 million yesaterday, while sales rose 13% to $347 million. The retailer said it expects a better performance in 2013.

"People got a little bit excited and once they dig deeper there isn't growth coming until the middle of next year. That initial excitement has faded," says Mark Lister, head of private wealth research at Craigs Investment Partners.

Pumpkin Patch, the childrens' clothing retailer, dropped 1.7% to $1.15. Its full year results will be released on Tuesday. Forsyth Barr analyst Jeremy Simpson is forecasting a 22% rise in reported profit to $70.6 million and a sales increase of 15.5% to $230.5 million.

"They have focused the business back home and moved into the online space which is good and the market likes," Mr Lister says. "It is a little too early for evidence of that though – people will be looking for more progress online and of course the current trading conditions."

Shares in AMP NZ Office, which is changing its name to Precinct Properties New Zealand, fell 2.1% to $5.52 after the company announced it has agreed to buy Auckland's Westfield Downtown Shopping Centre from Westfield Group and Westfield Retail Trust for $90 million.

"It makes me wonder if they will buy another shopping mall in another city. Is it a change in strategy?" he says.

Tower, the insurance company that's about one-third owned by Guinness Peat Group, fell 5% to $1.71. Ryman Healthcare, New Zealand's largest retirement village operator, slid 1% to $4.05. The stock has gained about 52% this year.

The gainers were led by Heartland New Zealand, the lender formed from the merger of Pyne Gould's Marac Finance with the Canterbury and Southern Cross building societies, up 3.2% to an 11-month high of 64 cents.

Xero, the cloud-based accounting platform provider, rose 2.4% to $5.10. Cavalier, New Zealand's only listed carpet maker, climbed 2% to $2.08.

Shares in Pacific Edge, the Dunedin-based DNA diagnostic test company, had its shares halted by NZX Market Supervision after they jumped to a 13-year high of 34 cents. That is the highest since they spiked to 46 cents on May 9, 2004, valuing the company at $93 million. The stock has gained 47% this year.