NZ market flat as My Food Bag shares get slammed

A few stocks had a rough time on the local index today but none suffered quite as much as food kit company My Food Bag as its share price plummeted by almost 30% as it will pay no dividend this year.

Friday, February 17th 2023, 6:04PM

by BusinessDesk

The S&P/NZX 50 index edged down 13.1 points, or 0.11%, to 12,144.66. Turnover was $142.8 million.

The aggressive sell-off of My Food Bag shares came after the company told shareholders it was expecting to see slower trading than anticipated in its current financial year thanks to deliveries being down 11.8% on the year to the end of January and revenue also down by 8%.

The board now doesn’t intend to pay a final dividend for the current financial year at this stage but expects to start paying a dividend again from the 2024 financial year.

Craig’s Investment Partners’ Peter McIntyre told BusinessDesk that a variety of factors would’ve encouraged the massive share price drop.

“But the dividend is the key to it,” he said.

My Food Bag fell just shy of 30% by the time the market closed today – plunging 29.3% to 26.5 cents – by the end of the day, losing 11 cents off its share price from when the market opened this morning.

On the dairy front, dairy co-op Fonterra announced its chief operating officer Fraser Whineray will be resigning at the end of the financial year this July. Whineray joined the dairy company in 2020 after 12 years at Mercury NZ which included a period as its chief executive.

Shares in Fonterra Shareholders' Fund Units were flat at $3.10 by early evening.

Synlait Milk was up 4.7% to $3.57 after it said its Dunsandel factory – in the Canterbury region – will be audited next week as part of its manufacturing licence application to supply product ultimately bound for China.

Ministry for Primary Industries will be auditing the factory on behalf of China’s Statement Administration for Market Regulation as part of the registration process.

A2 Milk’s first-half result is also out on Monday, with the milk company widely expected to report a good result. The stock jumped 5.9% to $7.75 today.

In November, A2 said it was expecting low double-digit revenue growth in the full year, versus its prior view that there would be high single-digit growth.

General insurer Tower slipped 5.5% to 60 cents at market close after it estimated the cost of the severe wet weather that hit Auckland and the Upper North Island several weeks ago to be in the range of $95m to $125m.

“Costs for this event will predominantly be covered by Tower’s reinsurance for catastrophe events which has an excess of $11.875m,” the firm said.

When it came to Cyclone Gabrielle, Tower said it was in the “early stages” of estimating its financial impact – but noted it was likely to trigger Tower’s reinsurance for catastrophe events as well.

Seeka, New Zealand's largest kiwifruit grower, said that a number of its growing regions had “felt the force” of Cyclone Gabrielle in the past week.

Its core Bay of Plenty kiwifruit growing region had been spared by the worst of the weather, the company said, and it wasn’t “materially” impacted by the cyclone.

However, kiwifruit volumes from its 2023 harvest were expected to be lower than its 2022 harvest year thanks to additional factors like an early season frost, a variable bud break and now the cyclone.

The stock edged down 0.3% to $3 today.

Chorus also fell 4.2% to $8.37, as did aged-care provider Arvida Group which was down 5.4% to $1.05. Agribusiness Scales Corp also dropped 5.8% to $3.11.

The NZ dollar was trading at 62.43 US cents at 3pm in Wellington today, edging down slightly from 62.60 US cents at the same time yesterday.

Tags: Market Close