NZX50 holds at 13,000 after strong earnings results

New Zealand shares were almost flat as investors reacted to upbeat earnings results from Heartland Group and Summerset Holding, while some larger stocks declined.

Tuesday, August 24th 2021, 6:06PM

by BusinessDesk

The S&P/NZX 50 Index rose 7.79 points, or 0.1%, to 13,071.86. Turnover was $200 million.

Pushpay Holdings rose as investors continued to digest its acquisition of a church live streaming business for US$150m.

Investors initially had a cautious response to the news, Pushpay shares actually fell 2.5% following the announcement before recovering to close half a percent higher.

Today, the market had found some confidence in the deal with shares climbing 4.2% to $1.75 –– its highest price since late July.

Sam Trethewey, a portfolio manager at Milford Asset Management, said the slow reaction was likely because US$150m was expensive for an acquisition that won’t immediately boost earnings.

“There was some pause over the price,” he told BusinessDesk. “It is hard to know what the value is and how much synergy it’ll bring.”

Trethewey said the market was also reassessing Ampol’s takeover offer for Z Energy, at a price of $3.78, with a more sceptical eye. Shares in the fuel retailer fell 1.7% to $3.42 today.

“Some of the heat has come out of Z Energy as investors consider how likely the deal is to go ahead.”

However, Ampol was “a credible bidder who has done a lot of homework” and investors shouldn’t dismiss the idea out of hand, he said.

Summerset reported its first-half net profit was $263.8m, because the value of its property soared, with underlying profit also up 68% at $75m.

Shares in the retirement village operator climbed 4.6%, leading the market higher, to a record closing price of $13.80, briefly breaking above $14 during the session.

Heartland Group also reported strong full year earnings, with net profit up 21% at $87m, and declared a final dividend of 7 cents.

Shares in the specialist lender climbed 2.9% to $2.16 – just 2 cents below its all-time high.

The kiwi dollar was trading 68.91 US cents at 3pm in Wellington, up from 68.45 cents yesterday.

The trade weighted index was at 73.60, from 73.30 yesterday. The kiwi traded at 95.58 Australian cents from 95.61, 75.61 yen from 75.19 yen, 58.71 euro cents from 58.44 cents, 50.24 British pence from 50.15 pence, and 4.4668 Chinese yuan from 4.4422 yuan.

Tags: Market Close