NZ stocks: PRG will reveal cost of failed run for Farmers

By PAUL PANCKHURST

This is the week that the market should learn the cost to Pacific Retail Group of a failed tilt at department store chain Farmers.

The largely Eric Watson-owned PRG revealed in August that the costs of the Farmers bid and a "challenging retail environment" would have "a significant impact" on the half-year result. The result for the six months to September 30 is out on Wednesday.

In July, PRG dropped out of the running for Farmers, later sold by Foodland to jewellery company James Pascoe and Fisher & Paykel Appliances.

It told shareholders it had been "an expensive exercise". The costs included interest payments on capital notes issued to fund expansion. At the start of September, PRG instead splashed out $47 million on PowerHouse, a British appliance retailer that had toppled into receivership.

In the same period last year, PRG reported a bottomline profit of $6.1 million on sales of $270 million.

But last month, chairman Maurice Kidd said the influence of PowerHouse - not expected to turn a profit until next financial year - and the other factors could mean a loss for the period.

One of the sharemarket's big guns, financial services company Tower, also reports on Wednesday.

Merrill Lynch - the firm that has just upgraded Tower to "buy" from "neutral" - is predicting an operating profit for the year of $38 million and a bottomline loss of $116 million.

On the same day fishing company Sanford reports on the 13 months to September 30. The company has flagged a result "likely to be at least 20 per cent ahead of last year".

The biggest of a string of annual meetings comes on Friday at Ellerslie when The Warehouse Group fronts up to its shareholders.

Another significant - and possibly controversial - meeting is on Thursday when ING Property Trust seeks unitholder approval to buy 71 properties from MFL Mutual Fund and SIL Mutual Fund for $282.7 million. Some MFL investors oppose the deal.