Kathmandu climbs as NZ shares rise

kathmanduNew Zealand shares have risen. Kathmandu Holdings gained on the back of a positive earnings forecast by its would-be acquirer, Briscoe Group. Heartland New Zealand advanced after the bank affirmed its profit guidance.

The S&P/NZX 50 index rose 21.08 points, or 0.4 per cent, to 5891.85. Within the index, 25 stocks rose, 17 fell and eight were unchanged. Turnover was $102 million.

Kathmandu advanced three per cent to $1.72. The outdoor goods retailer is in the middle of a takeover offer from Briscoe Group, which said first-half profit rose at least 8.1 per cent to $20 million, outpacing sales growth in the period, as the company continued to fatten its margins. The homewares and sporting good chain operator is offering Kathmandu shareholders five Briscoe shares for every nine Kathmandu shares as well as 20 cents in a bid to buy the remaining 80.1 per cent of the stock it does not already own.

Outside the benchmark index, Briscoe rose 1.1 per cent to $2.85.

“The two share prices are pretty much trading in tandem at the moment because it is pretty much a scrip takeover,” Williamson said. “Kathmandu shareholders will be waiting for the independent target statement and independent valuation before taking any action, and that’s due out over the next couple of weeks.”

Heartland climbed 4.4 per cent to $1.19, after the Auckland-based lender said profit may rise as much as 15 per cent in 2016, while affirming its guidance for earnings this year to reach the top of its forecast range at about $48 million, up from $36 million in 2014. In the wake of plunging global dairy prices, which have stretched the balance sheets of some farmers, Heartland sought to assure the market that the dairy sector amounted to about 7.6 per cent of its total lending book.

“The share price has been drifting off in recent times and that was on concerns about exposure they had to the dairy sector,” Grant Williamson, director at Hamilton Hindin Greene said. “They came out today and said it was quite minimal and they reaffirmed their guidance for the full year.”

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