NZ sharemarket dips despite solid results

An unforgiving New Zealand sharemarket slipped further on another busy day of company reporting that again saw a bunch of solid results.

Friday, August 25th 2023, 6:36PM

by BusinessDesk

The S&P/NZX 50 Index never got into gear and closed at 11,443.5, down 34.47 points or 0.3%. The index finished the week with a decline of 1.23% and is down nearly 5% this month – the weakest since January last year. It is also flat for the year.

There were 82 decliners and 46 gainers on the main board, with 25.85 million shares worth $87.7m changing hands.

Mark Lister, investment director with Craigs Investment Partners, said there is definitely a downbeat tone to markets internationally, and New Zealand is no different.

“We haven’t seen too many terrible results, but there hasn’t been anything encouraging for the local market to latch onto. Managements are playing their cards close to their chests on outlook because of the economic uncertainty,” Lister said.

"Vector had a solid result with a special dividend, Port of Tauranga’s was decent, NZX’s was commendable, Michael Hill was in line with expectation, Delegat was at the lower end of guidance, and Vista had a modest improvement but no change to its outlook,” he said.

Fisher and Paykel Healthcare was down 17c to $22.33; Chorus declined 13.5c to $7.855; Auckland International Airport decreased 8c to $7.95; SkyCity shed 6c or 2.58% to $2.27; and Skellerup was down 9c or 2.12% to $4.15.

Sky TV declined 5c or 1.96% to $2.50; Serko was down 7c or 1.83% to $3.76; Scott Technology shed 10c or 2.9% to $3.35; and Smartpay shed 5c or 3.03% to $1.60.

Ebos Group was up 15c to $36.04; Fonterra Shareholders’ Fund increased 9c or 2.92% to $3.17; and Mainfreight added 31c to $66.10.

Vector, gaining 2c to $4.03, reported an 8.1% increase in annual revenue to $1.19 billion, operating earnings (Ebitda) of $523.3m and a 9.8% gain in net profit to $112.54m.

The 50% sale of Vector’s metering business netted $1.509b, which was used to reduce debt. But Vector is paying a final dividend of 14c a share on Sept 14, including a 5.5c special dividend.

Amongst other energy stocks, Genesis was down 4.5c or 1.8% to $2.455; Contact declined 8c to $8.17; and Mercury was up 4c to $6.295.

NZX was up 3c or 2.56% to $1.20 on a 16.9% increase in first-half revenue, and net profit was down 5.6% to $6.987m. It is paying an interim dividend of 3c a share on October 5.

Operating earnings were $20m, up 15% compared with the six-month period last year, and NZX told the market that full-year earnings were tracking towards the upper end of the $36m-$40m guidance.

Sparkling result

Michael Hill, which has more than 2m loyalty members, was up 3c or 3.13% to 99c after reporting record revenue of $629.6m, up 5.8%, for the 12 months ending June. Australia had $331m revenue, NZ $132.4m and Canada $158.9m.

Net profit decreased from $46.7m to $35.2m, and operating earnings (Ebit) declined 6% to $58.9m. Group sales for the first seven weeks of the 2024 financial year were up 1.2%, but sales on the core Michael Hill brand were down.

Cinema software management firm Vista Group fell 17c or 9.09% to $1.70 after suffering an $8.5m net loss on revenue of $53.96m, up 16.9%, for the six months ending June. Operating earnings (Ebitda) were $2.5m, down 19%, and Vista confirmed full-year revenue guidance of $142-$147m.

Vista said average monthly cash use was $1.2m, and it expects to have free cash flow during the fourth quarter of the 2024 financial year – a year earlier than expected.

Port of Tauranga, down 2c to $5.94, overcame a challenging shipping environment with a 12.2% increase in revenue to $420.92 and a 5.2% gain in net profit to $117.13m for the year ending June. It is paying a final dividend of 8.8c a share on October 6.

The port, the largest in the country, told the market that total trade of 24.7m tonnes was down 3.6%, with container volumes declining 5.1% to 1.18 million TEUs (20-foot equivalent units).

Fellow port companies Napier was down 5c or 2.19% to $2.23, and Marsden Maritime Holdings, which reported a 39.5% fall in annual net profit to $7.92m, declined 8c to $4.90.

Leading wine exporter Delegat Group declined 8c to $8.47 despite a 15% increase in operating revenue to $375.8m, a 7% gain in operating earnings (Ebitda) to $120.4m and a 3% increase in net profit to $64.82 for the 12 months ending June.

Delegat sold a record 3.7m cases globally and expects to increase the amount by 4% in the 2024 financial year. It also provided net profit guidance of $62m-$67m. Delegat is paying a final dividend of 20c a share on October 13.

Publisher and broadcaster NZME was down 5c or 5.05% to 94c after reporting a 6% decline in revenue to $166.22m and a 76% fall in net profit to $1.978m for the six months ending June compared with the same period last year. It is paying an interim dividend of 3c a share on September 27.

NZME said overall subscriptions increased from 209,000 to 218,00, with 123,000 being digital only, and advertising revenue was down 7% to $116.4m.

Tags: Market Close