Pacific Edge rises as wider sharemarket stutters

Pacific Edge made a rapid recovery, rising more than 110% after receiving a reprieve on funding for its Cxbladder tests in the United States, while an uncertain New Zealand sharemarket had its first fall in eight trading days.

Thursday, July 6th 2023, 6:32PM

by BusinessDesk

The S&P/NZX 50 Index wavered in the afternoon and closed at 11,959.33, down 43.13 points or 0.36% after reaching an intraday high of 12,055.2.

Market sentiment also softened across the Tasman with the Australian S&P/ASX 200 Index falling 1.29% to 7159.6 points by 6pm NZ time.

There were 53 gainers and 79 decliners on the local market with 42.67 million shares worth $117.9m changing hands.

Greg Main, a Jarden Wealth Management adviser, said the local market was thinly traded and offshore investors selling can easily move prices. There seems to be a lack of conviction around, at present, and the market might trade sideways for a little longer, he said.

Cancer diagnostics company Pacific Edge surged 10.6c or 112.77% to 20c on 809 trades or 11.74m shares worth $2.77m. It was one of the biggest single day rises on the NZX market.

US Medicare funding of Cxbladder tests was due to end on July 17 – the announcement early last month caused Pacific Edge to plummet from 49.5c to 10.9c – but the local coverage determination process will now be repeated with an open meeting and public comment. No time frame has been provided for the process.

Pacific Edge said a more robust procedure was needed and it thanked Medicare contractor Novitas for the opportunity to discuss their evidentiary review of Cxbladder products with them.

Main said it will be interesting to know what pressure has gone on Novitas behind the scenes and it was logical for Pacific Edge to contest the ruling because of what it does for its business.

Cinema software management firm Vista Group rose 13c or 7.69% to $1.82 after telling the market it was restructuring and bringing all its brands under one business model, resulting in a 6-8% reduction in global staff.

Vista is now spreading its capital expenditure over four years, at $20m a year, and expects to have positive cash flow in the fourth quarter of 2024, 12 months earlier than previous guidance. It is on target for annual recurring revenue of $175m-$205m and a 15% increase in operating earnings (ebitda) by the end of 2025.

Tech and property stocks rise

The technology sector was up 1.96% on the NZX index, with Serko also gaining 5c to $3.90. Gentrack was down 8c or 1.88% to $4.17.

The property sector had a strong day. Goodman Trust increased 5c or 2.39% to $2.235; Stride was up 4c or 2.88% to $1.43; Argosy gained 2.5c or 2.16% to $1.18; and Vital Healthcare Trust added 1.5c to $2.355.

The market was led down by Fisher and Paykel Healthcare declining 19c to $24.5; Ebos Group falling 72c or 1.9% to $37.18; Infratil giving up 16c to $10.19; Chorus decreasing 12c to $8.26; Spark down 7c to $5.03; and Port of Tauranga shedding 8c to $6.20.

ANZ Bank was down 55c or 2.12% to $25.35; Westpac declined 29c to $22.81; Synlait Milk gave up 4 or 2.37% to $1.65; Vulcan Steel shed 24c or 2.6% to $9; and Tourism Holdings decreased 9c or 2.4% to $3.66.

Freightways picked up 15c or 1.81% to $8.45; A2 Milk gained 4c to $5.48; Skellerup Holdings improved 12c or 2.67% to $4.623; and The Warehouse collected 5c or 2.76% to $1.86.

Retirement village operators Summerset Group gained 11c to $9.90, and Ryman Healthcare was also up 11c to $6.94.

Other gainers were Channel Infrastructure up 3c or 2.01% to $1.52; Seeka gaining a further 5c or 1.82% to $2.80; Scales Corp increasing 11c or 3.43% to $3.32, My Food Bag collecting 2c or 9.3% to 23.5c; and Salt’s Carbon Fund units rebounding 7c or 5.65% to $1.31.

After upgrading its earnings guidance, 2 Cheap Cars Group increased 8c or 26.67% to 38c. The car dealer is now expecting a full-year net profit of $4.2m-$5m compared with the previous guidance of $3.8m-$4.2m. First quarter net profit is expected to be $1.3m, up from $400,000 in the same period last year.

Financial technology firm PaySauce, unchanged at 25c, reported a 41% rise in annual recurring revenue to $7m for the year ending the June quarter. The recurring revenue for the June quarter increased 48% to $1.73m and it has 7087 customers, up 9%.

NZ King Salmon Investments, unchanged at 21c, has appointed Carl Carrington as the new chief executive, starting August 7. Carrington was chief executive of Moana NZ for six years and managing director of the Heineken-Lion Australian business.

Goods Spirits Hospitality, unchanged at 2.5c, has received final bids for its bars and restaurants and its lender Pacific Dawn has extended the due diligence period to Aug 8.

Tags: Market Close