Z Energy leads NZ shares higher

Fuel retailer Z Energy propelled the New Zealand share market higher as brokerage firm Jarden reiterated its ‘buy’ recommendation ahead of its full year result.

Thursday, April 29th 2021, 8:55PM

by BusinessDesk

The S&P/NZX 50 Index rose 69.06 points, or 0.5%, to 12,715.2. Within the index, 23 stocks fell, 15 rose and 12 were unchanged. Turnover was $150.5 million.

On Thursday next week, Z Energy will report its earnings for the 2021 financial year and Jarden analysts are expecting it to be a winner.

They are forecasting full year earnings of $243m at the high end of Z Energy’s guidance range which tops out at $245m. Forsyth Barr are less bullish, expecting earnings to land in the lower end of the guidance at about $237m.

Investors were sharing Jarden’s enthusiasm on market today, pushing Z Energy’s share price up 3.5% to $2.63 — although volume was light with just half a million shares traded.

Infratil, a former part-owner of Z Energy, had its share price climb 0.7% to $7.05 after announcing it would acquire a majority stake in Pacific Radiology for up to $350 million from its existing doctor owners.

Pacific Radiology is the largest private diagnostic imaging service provider in New Zealand, operating 46 clinics in the South Island and lower North Island and employing 90 radiologists.

Sam Trethewey, a portfolio manager at Milford Asset Management, said the purchase fits with Infratil’s recent purchase of a similar business in Australia.

“It shares some of the same themes as Qscan, such as the ageing population and preventative care,” he said.

“The challenge with these types of businesses, which are dependent on a large number of individual doctors, is to get their incentives right,” he said.

Existing doctor shareholders and management will retain between a 40% and 49.9% stake in company, helping to keep incentives aligned.

Tourism Holdings had the day’s biggest fall, dropping 2.6% to $2.63.

Outside of the local market, New Zealand-born San Francisco-based shoe brand, Allbirds is rumoured to be following Rocket Lab as the next Kiwi company to leapfrog the NZX and list on the Nasdaq.

The New York Times reported the US-registered company is in the process of interviewing banks in the lead up to an initial public offering.

The kiwi dollar was trading 72.61 US cents at 5pm in Wellington, up from 72.09 cents yesterday.

The trade-weighted index was at 75.34 at 5pm, from 75.05 yesterday. The kiwi traded at 93.17 Australian cents from 93.07 cents, 78.88 yen from 78.49 yen, 59.84 euro cents from 59.72 cents, 52.02 British pence from 51.91 pence, and 4.6950 Chinese yuan from 4.6728 yuan.

Tags: Market Close