KEY POINTS:
There's nothing like a results season to help investors kick off their jandals and shake the sand out of their undies. The market has been typically quiet through January.
"There's been two-tenths of nothing going through the market at the moment," says Ricky Ward at Tyndall Asset Management.
"Most people are sitting back with a bit of nervous apprehension to see if the results will deliver what the share prices suggest they should deliver."
Telecom kicks off the season today but with its half year result overshadowed by the Yellow Pages sale and PowerTel acquisition.
There will be strong interest in GPG which reports this month. Many brokers see the Tony Gibbs-led investment group as a positive turnaround story right now and are hungry for information about the Coates threads business - which dominates the portfolio.
GPG shares have risen from $2.42 on January 3 to close yesterday at $2.58. Longer term they are up from $1.90 at the start of 2006 which is pretty solid growth.
Forsyth Barr head of research Rob Mercer is looking forward to the Fletcher Building result on February 14 - more so for any forecasts.
There has been four or five years of positive surprises and building consent data had a burst of recovery last year and was well ahead of expectations, he says. The trick will be to convert that data to results.
Air New Zealand also has strong share price growth to live up to.
The stock has almost doubled in value since hitting a low of $1.13 in July last year. It was up 1c at $2.00 yesterday. That result is due on February 27.
READY AND WAITING
Trading might be quiet right now but there is plenty of action bubbling away below the surface. The biggest game in town is still The Warehouse.
The market consensus is that both potential bidders - Foodstuffs and Woolworths - are likely to wait for Commerce Commission clearance before laying their cards on the table. That's not always the norm with takeovers. Either company could have made an offer conditional on getting Commerce Commission approval at a later date.
But the word is that Stephen Tindall wanted unconditional bids. That will make the final deal cleaner and less disruptive for management and staff. Any outstanding Commerce Commission applications could have been subject to appeals and the process could drag on to the detriment of the business. Warehouse shares closed at $7.27 yesterday.
DINNERTIME
Another NZX stock that looks like a goner this year is Restaurant Brands. Management has already admitted that it has been approached by at least one potential buyer. The fast food company - which holds the franchise rights for KFC, Pizza Hutt and Starbucks - is understood to have appointed an investment bank and it looks like the sale process is about to get under way.
TALL TOWER
Tower New Zealand shares have also been on a golden run since the start of the year. Given the spectacular lack of investor enthusiasm for the New Zealand part of the business when the company split down transtasman lines in November it is hard to see anything other than takeover speculation driving that one. Tower shares have surged 28c since January 18 to close at $2.40 yesterday.
POWER PLAY
Listed lines company Vector could also be in play this year - although what sort of action it attracts will depend on decisions which are yet to rise from the foul swamp that is Auckland local body politics.
The quagmire hasn't deterred some investors. After last month's Business Herald story, which revealed that the three Auckland councils have plans to try to wind up the Auckland Energy Trust (which controls 75 per cent on behalf of the public), the shares have risen from $2.55 the day before the story ran to a high of $2.69, where they sat yesterday.
What the councils might do with the shares is far from resolved but the abolition of the trust is getting a general thumbs up from the market.
There are a couple of other factors at play with Vector and the stock has been on the up since mid-December.
The boardroom scrap which saw directors John Goulter, Tony Gibbs and Greg Muir depart dented the stock briefly. But one cause of that scrap - the fact that chairman Michael Stiassny had gone it alone to do a deal with regulators - is now being seen as a positive by the market. Anything that brings regulatory clarity is a good thing for a stock like Vector.
Another positive is that the cool wet December weather will probably have given its half year profit a boost.
The company will deliver its half year result to December 31 next Friday.
DOLLAR DRIVER
Goldman Sachs has revised its currency forecasts for the year ahead due to the dollar's recent strength against trading partners. This has meant adjustments to the earnings outlook for kids clothing retailer Pumpkin Patch and resin manufacturer Nuplex. Significantly Goldman has revised its outlook for the Kiwi/Aussie cross rate up by 5 per cent to 85.5c from 81.6c.
This has prompted a 4 per cent reduction in 2007 net profit forecasts for Pumpkin Patch - to $31.1 million from $32.5 million.
Pumpkin Patch - which delivers its half year result on February 20 - has not yet provided the market with any guidance. Although, as analyst Rodney Deacon notes, the current Pumpkin Patch share price is predicated on maintaining strong growth, not just current profit levels. The shares closed at $4.80 yesterday and have continued the strong run into the New Year.
The accelerated rate of store growth in the US and UK means Deacon retains its positive outlook on the stock, rating it a long term "buy" and a "market perform" in the short term. The stronger currency prompts similar reduction in 2007 forecasts for Nuplex. It is downgraded from $36.4 million to $35.5 million. Although the price of oil - a key raw material for resins - has dropped dramatically in the past three months an index of all Nuplex's raw materials shows most of their inputs are still priced above the long run average. That means margins could remain tight for some time yet. But looking out 12 months Goldman still sees strong prospects for the shares.
Nuplex shares have dipped in the past month from $7.44 on January 11 to close at $6.88 yesterday.