F&P Healthcare drags market down with lower half-year profit expected

New Zealand’s market fell in tandem with Fisher & Paykel Healthcare shares after the healthcare products manufacturer said it expects its first-half revenue to drop by 26% and net profit to more than halve as covid-related sales continue to fade.

Friday, August 19th 2022, 5:55PM

by BusinessDesk

The S&P/NZX 50 index fell 129.5 points, or 1.1%, to 11,684.81. Turnover on the main board was $110.1 million.

Fisher & Paykel Healthcare now expects operating revenue to be $670m in the six months ending Sept 30, versus $900m in the same period a year earlier.

The company’s shares fell 9.6% to $19.11 after the company’s announcement this morning, but made up some lost ground through the day and were down 6.2% to $19.85 by early evening.

Stock market operator NZX Limited shares jumped 3.1% to $1.35 after its management discussed the recent Kiwi Wealth sale on an analyst call on Friday morning.

Chief executive Mark Peterson said he’d watched the transaction closely because it had implications for the value of NZX’s Smartshares funds business.

A note from Craigs Investment Partners said NZX was benefiting from the “attractive multiple” in the Kiwi Wealth deal and its earnings were holding up in difficult conditions.

The stock market operator reported half-year revenue up 8.8% at $46.2m, operating earnings up 2.8% to $17.4m, and net profit down 3.2% to $7.8m.

Shares in My Food Bag were up 2.8% to 73 cents after the company’s co-founder Cecilia Robinson was elected to the board at its annual meeting on Friday. Entrepreneur Robinson is also a founder of Tend Health and a Pie Funds board member.

The meal-kit company had a weak start to the 2023 financial year as customers reduced orders or shifted to cheaper products within the range.

Its management told investors that earnings and net profit are expected to be lower than the $34m and $20m achieved in 2022.

Genesis Energy reported underlying earnings marginally ahead of guidance at $440.3m off the back of strong hydroelectric generation despite soft earnings from its Kupe oil and gas field.

The electricity company said earnings were expected to be about $455m in the 2023 financial year.

Jarden senior analyst Grant Swanepoel said this was slightly below his expectations but broadly in line with the wider market. Shares in the company fell 1.2% to $2.95.

Energy companies Mercury NZ and Contact Energy also reported earnings earlier in the week. Today, Mercury was down 0.3% to $6.28 and Contact Energy was also down, 1.1% to $7.86.

Mercury pushed its operating earnings to $581m in the year to June 30, up from $463m in the previous financial year.

Contact reported its annual profit had dipped 2.6% in the 12 months ended June 30 compared to the previous period. Net profit fell to $182m, which was down from $187m in the June 2021 year.

Meridian Energy was down 0.8% to $5.26, and Manawa Energy fell 1.6% to $6.25.

Restaurant Brands NZ fell 2% to $9.11. Restaurant Brands – which operates the KFC, Pizza Hut, Carl's Jr and Taco Bell franchises – warned in July that the company will report a weaker half-year profit on Aug 29.

Heartland Group was up 2.4% to $2.16 on light volume while Westpac was down 0.2% to $24.60. ANZ Bank rose 1.8% to $25.61.

Rubber manufacturer Skellerup was up 0.5% to $5.95.The company breezed past its previous guidance yesterday and lifted annual net profit by 19% to $47.8m.

The company attributed its growth to the rubber manufacturer’s “unwavering focus” on its customers and products.

Auckland International Airport fell 0.4% to $7.62. The airport beat its profit guidance yesterday, but the market wasn’t happy with the company’s outlook and it ended the day in the red.

On Monday, telecommunications provider Chorus, express package group Freightways and petroleum company Ampol are reporting earnings.

By the end of today, Freightways was down 1.6% to $9.40, Chorus fell 1% to $7.80 and Ampol was up 1.4% to $37.50.

On the currency front, the NZ dollar was sitting at 62.31 US cents at 3pm today, down from 62.73 US cents yesterday.

Tags: Market Close