NZ sharemarket returns to gaining ways

The New Zealand sharemarket got back on a winning run – driven by a surge of more than 9% from Mainfreight on its better-than-expected half-year financial result.

Thursday, November 9th 2023, 6:27PM

by BusinessDesk

The S&P/NZX 50 Index fell to an intraday low of 11,113.18 but rebounded strongly in the afternoon to close at 11,197.66, up 46.36 points or 0.42%.

There were 82 gainers and 44 decliners over the whole market on volumes of 26.76 million share transactions worth $80.97m.

Mainfreight jumped $5.22 or 9.06% to $62.81 after reporting a 21.6% decline in half-year revenue to $2.36 billion and a 42.6% fall in net profit to $124.55m. Mainfreight is paying an interim dividend of 85c a share on Dec 15.

The transport and logistics company said the six months ending September was “one of our toughest”, but the business had returned to normalised trading. In the previous corresponding period, exceptionally high freight volumes and rate structure overly inflated its trading result.

The air and ocean (revenue down 43% to $874.06m) and domestic transportation divisions declined, while Mainfreight’s operations were most affected in Europe, Asia and the United States (where revenue was down 42.3% to US$325m [NZ$548.1m] and profit before tax falling 79.7% to US$12.0m).

“We expect our second six months of trading to improve, albeit marginally, and remain confident of our medium to long-term growth prospects,” Mainfreight told the market.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said investors were expecting the worst, and Mainfreight’s numbers came in close to brokers’ predictions.

“The September trading in Australia and New Zealand was more encouraging than what we heard from Freightways earlier. Mainfreight is a company with a very long-term track record, and it can’t avoid recessions,” Robershawe said.

Uncertainty over the impact of the weight-reducing drug GLP-1 continues to plague Fisher and Paykel Healthcare, which fell 73c or 3.25% to $21.75.

Other blue-chip stocks were stronger. Ebos Group was up 51c to $37.51; Meridian Energy gained 17.5c or 3.53% to $5.13; Contact increased 5c to $8.03; Fletcher Building added 6c to $4.55; and Summerset Group was up 7c to $9.95.

Other gainers were Seeka improving 7c or 3.21% to $2.25; Smartpay rising 9c or 7.14% to $1.35; Vulcan Steel increasing 23c or 3.05% to $7.78; Serko up 8c or 1.87% to $4.36; and Bremworth adding 2c or 3.85% to 54c.

Vital Healthcare Property Trust, up 3c to $2.03, reported a 4% increase in operating profit to $18.558m for the first quarter.

Heartland Group, down 3c or 1.83% to $1.61, confirmed its full-year net profit guidance of $116m-$122m at its annual meeting. It is presently integrating the Challenger Bank, which will operate the group’s Australian business activities.

On the Australian market, NZ-bred cloud accounting firm Xero was down A$15.83 (NZ$17.13) or 13.8% to A$98.89 at 6pm NZ time after reporting a steady half-year result.

Operating revenue increased 21% to A$799.55; subscribers were up 13% to 3.945m; operating earnings (Ebitda) gained 90% to $206.09m, but net profit fell $16.13m to $54.08. Xero aims to reduce operating expenses to income to 75%, from the present 79.1%.

Tags: Market Close