Skellerup a bright note as NZ sharemarket tumbles

Skellerup Holdings was a beacon of light in reporting record earnings on the New Zealand sharemarket as blue chip stocks took a tumble in the biggest single-day fall for more than two months.

Thursday, August 17th 2023, 6:21PM

by BusinessDesk

The S&P/NZX Index fell sharply at lunchtime and closed at 11,651.58, declining 111.53 points or 0.95% – it was down 1.03% on June 7.

There were 89 decliners and 33 gainers over the whole market on volumes of 31.72 million share transactions worth $117.46m.

Rubber products manufacturer Skellerup Holdings rose 26c or 6.22% to $4.44 (reaching an intraday high of $4.70) after reporting a record net profit of $50.94m, up 7%, for the year ending June. Revenue increased 5% to $333.53m, and operating earnings (Ebit) were up 7% to $71.7m.

The industrial division’s revenue increased by 5% to $216.8m and profit by 10% to $42.9m. Agriculture revenue was up 6% to $117m and profit 1% to 34m with increased footwear sales.

Skellerup is paying a final dividend of 14c a share on October 13 and said: “We are confident we can continue to deliver long-term sustainable earnings growth. Increased sales into wastewater, high-performance foam and roofing applications were key drivers for another record result in the 2023 financial year.”

But few leading stocks were spared. Fisher and Paykel Healthcare declined 50c or 2.16% to $22.65 and reached its lowest level this year.

Contact Energy shed 10c to $8.49; Ebos Group was down 39c to $35.39 on trade worth $24.33m; Mainfreight declined 20c to $66.80; Infratil decreased 9c to $9.83; and Spark was down 11c or 2.13% to $5.05 on the eve of reporting its latest financial result.

Fletcher Building was down a further 8c to $4.95 and has fallen almost 10% in two trading days following the release of its annual result. Fletcher’s Australian division chief executive Dean Fradgley is retiring at the start of next year.

Auckland International Airport was down 13c to $8.20, and Air New Zealand declined 1.5c or 1.95% to 75.5c. The airport released its 2023-27 aeronautical price setting documentation, which sees charges double over that period, much to the wrath of Qantas and Air NZ.

Big names weaken

Matt Goodson, managing director of Salt Funds Management, said the larger names were certainly quite weak.

“Ebos needs a good result to settle investors’ nerves after losing the Chemist Warehouse contract. There’s concern about Fletcher Building’s increasing debt levels and the amount of provisioning,” he said.

“Auckland airport’s disclosure shows more capital expenditure on items it is unlikely to get a (regulated) return on, and it may require a capital raising by 2027. And all eyes will be on the Spark result after a soft first half.”

Goodson said the Reserve Bank’s monetary policy statement that the official cash rate will stay higher for longer created some nervousness, “but it should not have been a surprise.”

However, long-term bonds keep increasing. The NZ 10 Year Government Bond yield was up 10.5 basis points to 5.066% – its highest level since July 2011.

The US 10 Year Treasury Note yield gained 3.4 basis points to 4.29%. The July Federal Reserve meeting minutes indicated that additional tightening may be necessary to bring down inflation, and shares were sold off for the second day running.

The Dow Jones Industrial Average was down 0.52% to 34,765.74 points; S&P declined 0.76% to 4404.33; and Nasdaq Composite fell 1.15% to 13,474.63.

Across the Tasman, the S&P/ASX 200 Index had fallen 0.74% to 7142.1 points by 6pm NZ time and had lost 2.93% over the last five trading days.

At home, Synlait Milk fell 8c or 5.13% to $1.48; Serko was down 16c or 4.06% to $3.78; Seeka declined 9c or 3.61% to $2.40; PGG Wrightson shed 7c to $4.04; Freightways was down 16c or 1.89% to $8.29; and Delegat decreased 10c to $8.60; its lowest level in four months.

Leading banks ANZ decreased 41c to $26.55, and Westpac shed 35c to $23.20.

Napier Port, down 4c to $2.35, reported a 19.5% decrease in third-quarter revenue to $27.7m compared with the same period last year and a 40.2% fall in net profit to $4.2m from $7m.

Revenue for the nine months ending June was $90m, up 5.7% and boosted by the return of cruise ships, and net profit was $12.9m, down 19.5%. Napier confirmed its full-year operating earnings guidance of $34.5m-$36.5m, excluding insurance recoveries from Cyclone Gabrielle.

Amongst the few gainers, Oceania Healthcare was up 2c or 2.67% to 77c, Scales Corp added 5c to $3.28, and Radius Residential Care improved 0.006c or 3.09% to 20c.

Publisher and broadcaster NZME, up 1c to $1, is buying the remaining 20% of shares it doesn’t own in OneRoof for $2.1m in instalments through to July 2026.

Blis Technologies, gaining 0.001c or 4% to 2.6c, has signed a licensing and marketing agreement with an Australasian cosmetic skincare company for its facial live probiotic serum.

Tags: Market Close