Hopes ride on punters' favourite

By IRENE CHAPPLE

Eyes will be on sharemarket darling Fletcher Building this week, with expectations that it will produce a great six-month result.

The result, due on Wednesday, follows Fletcher Building's acquisition of Australian's Laminex Group in November and the oversubscription of its $150 million capital notes issue in December.

A healthy share price is being stoked by ongoing strength in the housing market helped by net migration, a robust domestic economy and low interest rates.

The number of building consents last year was up 32 per cent on the previous year, and close to 26-year highs.

Analysts say the first-half net profit is expected to be about $70 million, up from $41 million on the same period a year earlier.

Fletcher Building has forecast first-half earnings before interest and tax of $140 million, up 80 per cent on a year earlier.

Chief executive Ralph Waters will talk about the company's performance at a media briefing at noon.

Tower's New Zealand equity manager, Wayne Stechman, said that although a bumper result had been expected for some time, shareholders might be "surprised on the upside".

But the impact of an economic slowdown in Australia, compounded by the drought, might affect future earnings, said Stechman.

Meanwhile, Contact Energy has its annual meeting tomorrow, and chairman Phil Pryke's speech is likely to focus again on the future of natural gas supplies.

Contact has been talking for some years about the need for more gasfields to be discovered and brought into production.

Last week's breakdown at the Maui gasfield that left Contact's thermal power stations without fuel has put the issue on to the front page.

Contact will also update shareholders about its purchase of a Taranaki gas-fired power station from NGC in December. Other overseas plans, particularly in Australia, may be revealed.

On Wednesday, takeover target Goodman Fielder will report its half-year result, bringing it forward from the previous reporting date of March 7.

The change comes after the Australian Takeovers Panel accepted that Goodman Fielder would issue more information on the company's earnings forecast for the current financial year, after an application from suitor Burns Philp.

Cinema company Sky City Leisure reports its half-year result on Thursday and investors will be hoping its interim profit reflects recent strong movie attendance figures.

The Motion Picture Distributors Association said last week that box office takings were up 14 per cent last year, thanks to a strong movie line-up.

Fisher & Paykel Healthcare, releasing its third-quarter result on Friday, may update its shareholders on how it will deal with its exposure to the strong New Zealand dollar.

"They are the loser with strong currency," said Stechman, "and that will be the critical thing - the extent to which it could force people to look at growth potential and how well covered they are."

Fonterra's six-month result is also of interest this week.

The Shareholders Council, representing 13,000 supplier farmers, will be writing a report on the results.

Council chairman Tony O'Boyle said he would need to see the numbers before commenting on Wednesday's results.

"The Shareholders Council is eagerly awaiting those numbers," he said.

The report, expected to take three weeks to produce, will be the council's first on a half-year result.

Last year's report on the full-year result was scathing.

In August, Fonterra reported a loss of $50 million for the year to May and the council's report found Fonterra had not added economic value in its first year.

That poor result was in a boomer of a season with favourable exchange rates, whereas exchange rates are now against them, which will offset some improvement in commodity prices.

However, O'Boyle said he suspected that Fonterra might have "picked up their game. But until we see the numbers we are flying in the dark".