F&P Healthcare props up NZX50

New Zealand's main share index edged up on Thursday despite mixed sentiment and as Fisher & Paykel Healthcare surprised with half-year revenue holding steady.

Thursday, November 25th 2021, 6:14PM

by BusinessDesk

The S&P/NZX 50 Index climbed 27.8 points, or 0.2%, to 12,794.61. Turnover was $189 million.

Fisher & Paykel, as the index’s biggest stock, was responsible for the bulk of this gain as it climbed 4.9% to $33.78 with 1.1m shares traded.

Investors had been expecting the exporter to report significantly lower revenue as pandemic-related sales subsided, however, income only dropped 1% as sales held up better than expected.

Head of private wealth research at Craigs Investment Partners, Mark Lister said the result was ahead of market expectations, with some analysts being too cautious with their numbers.

“When we wake up tomorrow, analysts will have beefed up their numbers and gotten a little more positive about the stock,” he said.

The outlook for the company remains foggy, with not even senior management able to predict when the inevitable sales slowdown will occur.

Latest NZX data

Tue, 23 Nov 2021 05:51 pm
S&P/NZX50 INDEX
12,688.53 +80.31 (0.64%)
$ VALUE TRADED
189,322,545.42
VOLUME TRADED
44,565,315.00
GAINERS
72

DECLINERS
78
TOP GAINERS (valued at above 10c)
Gentrack Group $0.200 11.76 %
KFL 10/03/2021 Warrants $0.011 10.58 %
Fisher & Paykel Healthcare Corporation $1.580 4.91 %
Ventia $0.080 3.52 %
Steel & Tube Holdings $0.040 3.05 %
TOP DECLINERS (valued at above 10c)
Serko $-0.980 -12.48 %
DGL Group $-0.180 -6.59 %
Pacific Edge $-0.080 -5.80 %
Solutions Dynamics $-0.160 -5.37 %
Plexure Group $-0.020 -4.65 %
Serko shares tumbled 12.5% to $6.87 as it came off a trading halt this morning after raising $75m in an underwritten share placement.

The placement attracted bids “well in excess” of the total offer, Serko said, and the book build cleared at the floor price of $7.05 — a roughly 10% discount to its previous closing price.

Any extra decline in the share price could be attributed to a rough earnings downgrade, from a consensus of $40m to less than $25m, announced in its half-year result yesterday.

Macquarie’s equity research said in a note that its investment thesis remains intact although growth is proceeding at a slower pace due to covid impacts.

“With financial year 2023 revenue downgraded 19% and 11x enterprise to value ratio, we expect volatility however see this as an opportunity for investors who envision Serko’s growth profile,” it said.

Stride Property also announced a capital raise of up to $120m intended to reduce debt and its loan to value ratio — the stock went into a trading halt at $2.21.

The property investor said this will give the company more flexibility and options for its dedicated office property fund Fabric, which was supposed to have listed in a now-cancelled public offer earlier this year.

Electronic componentry firm Rakon dropped 1.1% to $1.78 despite reporting revenue up 43% at $85.4m and earnings more than doubled at $26.4m.

The company is aiming to report earnings between $44m and $49m in the year ending March 2022.

Shares in Gentrack jumped 11.7% to $1.90 as the market rewarded it for hitting full year guidance with revenue of $105.7m and earnings of $12.7m.

The software company wouldn’t give guidance for 2022, except to say it would be ahead of the 2021 result.

Pacific Edge delivered results for the six months ended September which were described by one broker as being as “bang in line as a PEB result can be”.

Total revenue increased 66% to $6.7m and net loss after tax increased 27% to $9m.

“The company has cash of $90m+ up its sleeve due to the recent raising, now we await the view from the newly-appointed chief executive as to exactly what he will do with it,” the broker said in a note.

The NZ dollar slipped further from its perch, dropping from 69.34 US cents to 68.88 today, falling against the American currency amid strong US economic data and talk from US Federal Reserve about tightening policy.

Tags: Market Close