Shares sink on shock CEO resignations

New Zealand's main share index fell as surprise resignations from Pacific Edge and Synlait Milk’s chief executives sent both stocks tumbling.

Monday, April 12th 2021, 6:15PM

by BusinessDesk

The S&P/NZX 50 Index fell 55.64 points, or 0.4%, to 12,518.71. Within the index, 24 stocks fell, 20 rose and six were unchanged. Turnover was $198.9 million.

Pacific Edge led the decline, falling 4.2% to $1.15, after David Darling announced he would step down as chief executive in April next year.

On Friday, shares in the cancer diagnostic firm leapt more than 20% after the biggest healthcare group in the United States approved its Cxbladder test for bladder cancer.

Today’s decline likely reflects some profit-taking from that surge, rather than a reaction to Darling’s resignation as he will stay with the company in a consulting role.

Synlait Milk dropped 2% to $3.43 as investors reacted to the sudden and unexplained departure of its chief executive, Leon Clement.

A senior dairy analyst at NZX said the surprise resignation may be linked to the dairy processor’s 76% drop in net profit during the six months ended January.

The market announcement gave no reason for Clement’s resignation but noted the impact covid-19 had on Synlait and the challenge it presented to the management team.

Key customer A2 Milk – which is largely responsible for the net profit fall – also declined 0.4% to $8.57.

Renewable electricity generators continued to rebound just one week before the rebalancing of a critical clean energy index.

Meridian Energy climbed 3.1% to $5.62, Mercury Energy was up 3% at $6.75, and Trustpower rose 2.9% to $8.49.

Small scale firm, NZ Windfarms' share price jumped 5% to 21 cents after it completed a fixed price agreement for its electricity supply in 2022.

The board said the deal will result in revenue being “materially higher” compared to this year, although it wouldn’t announce earnings guidance until a budget is approved in the next three months.

Summerset shares climbed 0.9% to $12 after reporting March quarter sales had nearly doubled from the same quarter last year - although down a little from its record December quarter.

The retirement village operator sold 275 units in the three months ended March compared with 141 in the same quarter last year and 296 in the December quarter.

The kiwi dollar was trading 70.24 US cents at 5pm in Wellington, down from 70.39 cents on Friday.

The trade-weighted index was at 73.93 at 5pm, from 73.95 on Friday. The kiwi traded at 92.41 Australian cents from 92.30 cents, 76.97 yen from 76.95 yen, 59.10 euro cents from 59.15 cents, 51.34 British pence from 51.26 pence, and 4.6031 Chinese yuan from 4.6098 yuan.

Tags: Market Close