Tamsyn Parker 's Opinion

Money Editor for NZ Herald

Stock Takes: Happy with Hallenstein

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NZX chief executive Mark Weldon at their Wellington office. 6 October 2011 New Zealand Herald Photograph by Mark Mitchell
NZX chief executive Mark Weldon at their Wellington office. 6 October 2011 New Zealand Herald Photograph by Mark Mitchell

Craigs Investment Partners analyst Chris Byrne has downgraded his rating on Hallenstein Glasson Holdings from buy to hold but says he is happy with the company's performance.

The clothing retailer this week reported a half-year net profit increase of 26.5 per cent to $9 million but has warned it may be difficult to maintain its earnings momentum for the rest of the financial year.

Byrne said the downgrade was related to a rise in Hallenstein's share price. It was trading around $3.40 at the end of last year but has now risen to about $4. "It's not a change in view on the company ... but the outlook is now reflected in its price."

Byrne said he would be looking for further guidance from the company as to whether more growth would be possible. Shares in Hallenstein Glasson closed down 6c yesterday at $3.96.

POWER DOWN

It appears Contact Energy is already starting to feel the effects of upcoming changes to the NZX's index methodology.

Contact's share price hit a recent low this week of $4.61. The index changes are expected to see Contact's status in the main NZX 50 index drop sharply from 8.73 per cent to 4.58 per cent.

Forsyth Barr analyst James Bascand said fund managers were already selling down Contact in preparation for the change.

Those who get out now are expected to get a better price than if they wait. The changes are to be implemented at the June 2012 index review. Contact's share price closed down 1c yesterday at $4.67.

POPULARITY PLUS

Meanwhile Telecom's popularity streak is continuing with Australian fund manager Blackrock Investment Management increasing its stake to 5 per cent. Telecom's strong dividend is said to be attracting both local and overseas investors.

The telco is also expected to be close to announcing the appointment of a new CEO with the company thought to be down to the final three contenders to take over from outgoing chief Paul Reynolds.

Overseas applicants are said to have been strong but it's hard to know how the market would receive another outsider in the position and the likely large salary needed to attract an offshore leader.

Telecom's shares closed down 1c yesterday at $2.45.

WELL DONE WELDON

The annual report for the NZX shows soon-to-be-departing boss Mark Weldon received total remuneration of $1.1 million in the last financial year as CEO, slightly down on last year's $1.3 million.

The report also reveals he met his standard long-term incentive share scheme bonus target of compound 15 per cent growth on earnings per share between January 2008 and December 2010. However Weldon failed to meet the tougher bonus long-term incentive which had a target of compound 22.5 per cent earnings per share. Still, that's not a bad effort given the recent global financial crisis.

WOMAN ON BOARD

The NZX will announce its consultation policy today on how listed companies will have to report their progress on achieving diversity on boards.

The NZX itself has improved its diversity by appointing Alison Gerry to the board in February.

Gerry is also a director of Kiwibank, TVNZ, Queenstown Airport Corp and Pioneer Generation. Shares in the NZX closed up 2c yesterday on $2.81.

CELEBRATIONS

Director James Miller has had two reasons to celebrate of late. As well as being appointed to the board of the soon to be floated Mighty River Power he also marked his 50th birthday. Miller says he didn't have a party but will travel to Europe later this year, after the Mighty River float, to mark the occasion.

As well as Mighty River, Miller is on the board of the NZX, Auckland International Airport and three investment funds.

He has stepped down from Vector due to the clash with Mighty River and will move on to the board on May 1. He has also been a director on Contact's board.

TRADING ON

Enttities controlled by former KiwiSaver manager Peter Huljich have been making some changes to their investments. Huljich has increased his beneficial interest in Diligent Board Member Services from under 5 per cent to 7.12 per cent.

Diligent had a rocky start when it listed but has since become popular with a range of investors including Milford Asset Management and the ACC.

Best Investments, a company owned by Huljich's father and uncle, has also cut its non-beneficial interest from 7.16 per cent 5.25 per cent in NZF Group. Peter Huljich has maintained his beneficial interest of 0.92per cent.

Huljich was fined in December after pleading guilty to misleading investors in the Huljich Wealth Management KiwiSaver scheme.


This item has been corrected from an earlier version which referred to some changes in investments made directly by Peter Huljich. However the changes have been made by entities controlled by Peter Huljich.

- NZ Herald

Tamsyn Parker

Money Editor for NZ Herald

Tamsyn Parker is the NZ Herald's Money Editor. A business journalist for ten years, she has worked in the UK and NZ for the New Zealand Herald, the National Business Review and a specialist publication on investment products for financial advisors. She is passionate about helping readers learn more about to make their money work for them.

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