Solid results brought an end to days of decline for NZ sharemarket

The New Zealand sharemarket was more sympathetic on a lighter day for company reporting, and a2 Milk had a nice bounce-back.

Tuesday, August 22nd 2023, 6:28PM

by BusinessDesk

The S&P/NZX 50 Index finished at 11,485.26, up 26.56 points or 0.23%, following the 1.31% fall the day before.

The index traded between a low of 11,423.94 points and a high of 11,489.18. The main board had 56 gainers and 68 decliners, with 25.15 million shares worth $113.16m changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said the market was settling down after the rough day previously.

“A theme coming through the reporting is that the domestic economy is slowing faster than people expected and the high-interest costs – which are not going away in a hurry.

“Comvita had a better result, and Winton Land and Property for Industry were solid. There was a good bounce from a2 Milk after they gave an underwhelming outlook, but they still have a little way to go for people to have renewed confidence,” Solly said.

In the United States, the 10 Year Treasury Note yield hit a 13-year high of 4.346%, increasing the view that the economy will avoid a recession. The NZ 10 Year Government Bond yield was up 9.5 basis points to 5.16%.

Global marketer a2 Milk increased 15c or 3.21% to $4.83 after falling 12.52% the day before when it released its latest annual report.

Freightways gained 25c or 3.02% to $8.54; Contact Energy was up 10c to $8.32; Mercury, now the country’s largest electricity retailer with 860,000 customers, added 14c or 2.2% to $6.49; and Genesis collected 4c to $2.585.

Skellerup Holdings, up 9c or 2.13% to $4.31 and KMD Brands gaining 1c to 84c, rebounded after being removed from the MSCI Small Cap Index. Pacific Edge, down 0.001c to 11c, was also removed from the index.

Other gainers were Argosy Property, up 3c or 2.65% to $1.16; Turners Automotive increasing 10c or 2.9% to $3.55; Oceania Healthcare adding 3c or 4% to 78c; 2 Cheap Cars rising 4.5c or 9.89% top 50c; Smartpay Holdings gaining 11c or 7.14% to $1.65; and Vista Group up 4c or 2.21% to $1.85.

Winton gains

Developer Winton Land gained 3c to $2.58 after meeting guidance with $211.42m revenue, up 33%, and $64.63m net profit, up 104% for the year ending June. It is paying a final dividend of 2.16c a share on September 12.

Winton said it was a record year for delivery and settlements on 565 units worth $211.4m in revenue, 32.5% higher than the previous year, and gross profit margin increased from 45.4% to 51.4%.

Manuka honey producer Comvita, down 1c to $3.29, reported record revenue of $234.19m, up 12%, and net profit of $11.06m, down 13% for the year ending June – in line with market expectation.

Comvita is paying a final dividend of 3c a share on October 26. Comvita told the market that Greater China (including Taiwan and Hong Kong) exceeded $100m for the first time, and second-half revenue increased 17% compared with the previous corresponding period. The e-commerce share of revenue was 41.7%, an increase of 19.1%.

Operating earnings (Ebitda) were $33.5m, and Comvita forecasts double-digit growth for the 2024 financial year. It is on track to deliver $50m Ebitda by the end of the 2025 financial year.

Property for Industry, unchanged at $2.34, reported steady half-year revenue of $46.41m and a net loss of $30.52m due to a $55m reduction in the value of its portfolio. The company said Auckland industrial vacancy remains at all-time lows, driving a 4.7% increase in rent on 61 leases worth $32.8m during the first half of the year.

Chorus, which has completed the broadband fibre rollout and has 1.031m fibre connections, fell a further 23.5c or 2.88% to $7.915, with investors disappointed the company didn’t increase its dividend.

Fonterra Shareholders’ Fund was down 7c or 2.12% to $3.23; Vital Healthcare Property Trust shed 6c or 2.64% to $2.21; Task Group declined 2c or 3.85% top 50c; and TradeWindow decreased 1.5c or 4.11% to 35c.

Fast food operator Restaurant Brands was down 16c or 3.51% to $4.40. It has fallen from $16 on Aug 31, 2021. Sky TV declined 5c or 2.01% to $2.44, and PaySauce was down 1.5c or 6.67% to 21c.

Colonial Motor Company, up 5c to $9.25, reported steady revenue of $997.22m and trading profit of $30.34m, down 9%, for the year ending June. It is paying a final dividend of 42c a share on October 2.

Colonial said light vehicle trading conditions were inconsistent through the second half of the financial year, particularly due to changes in the clean car scheme and taxes on higher emitting vehicles driving short-term, artificial demand.

Tags: Market Close