F&P Healthcare propels share market higher

New Zealand’s largest listed company, Fisher & Paykel Healthcare, gave the share market a boost as it surged 5.5 percent after reporting a 73 percent increase in nine-month revenue.

Friday, January 22nd 2021, 6:07PM

by BusinessDesk

The S&P/NZX 50 Index rose 221.24 points, or 1.7 percent, to 13,333.43. Within the index, 27 stocks rose, 18 fell and five were unchanged. Turnover was $201.9 million.

After months of the index’s direction being dictated by international trends, local corporate news drove today’s climb while other Asian markets declined on concerns over a covid outbreak in China. Parts of Beijing have been in lockdown since mid-week.

“The lockdown in China has understandably raised some concerns among investors who, after a slow start to the global vaccine rollout, are debating how fast economies can vaccinate the most vulnerable and start returning to business as usual,” said Stephen Innes, chief global markets strategist at Axi.

Locally, the market was dominated by F&P Healthcare, which jumped 5.5 percent to $35.10, shaking off some recent weakness with a strong trading update.

Chief executive Lewis Gradon said hospital hardware sales had been tracking the elevated hospitalisation rates for covid-19, boosting revenue 73 percent in the nine months ended December.

Revenue from hospital hardware products increased five-fold over the period, making the November guidance of $1.72 billion revenue and $415 million profit “out of date”, Gradon said.

However, due to the “significant uncertainties” of the pandemic management declined to give new numbers, leaving exactly how much stronger the full-year result will be open to speculation.

Jarden analysts have previously estimated net profit at $478 million, up from $287.3 million in the previous financial year.

Electricity utilities continued to capture investors’ attention with Mercury NZ today adding $30 million to its full-year earnings guidance due to a recovery in its hydro storage and “strong” recent trading. Shares in the company rose 4.7 percent to $7.30.

Meridian Energy and Contact Energy made significant gains, as buyers appeared to pile back into a clean energy index fund on Thursday night after US president Joe Biden re-joined the Paris Climate Accord.

Meridian rose 5.2 percent to $8.08 and Contact climbed 4 percent to $9.19, the iShares Global Clean Energy ETF was up 4.4 percent.

Aged care provider Oceania Healthcare shares fell 1.3 percent to $1.48 after reporting its underlying earnings rose 2 percent to $35.4 million in the first half of its 2021 financial year. It traded at a record $1.50 yesterday.

Net profit jumped 67 percent to $24.8 million, due to increased valuations of its properties. However, financing and staff costs both rose during the period.

Auckland International Airport posted the day’s biggest fall, dropping 1.9 percent to $7.36, while Air New Zealand advanced 2.1 percent to $1.71.

The kiwi dollar failed to hold above 72 cents and was trading at 71.93 US cents at 5pm in Wellington, down from 72.07 cents yesterday.

The trade-weighted index was at 74.38 at 5pm, from 74.46 yesterday. The kiwi traded at 92.87 Australian cents from 92.67 cents, 74.47 yen from 74.57 yen, 59.08 euro cents from 59.40 cents, 52.43 British pence from 52.67 pence, and 4.6519 Chinese yuan from 4.6559 yuan.

Tags: Market Close