NZ sharemarket turns positive after days of decline

The New Zealand sharemarket calmed down and made a small gain, as blue-chip stock Ebos Group provided normal service with a solid first-half financial result.

Wednesday, February 21st 2024, 7:00PM

by BusinessDesk

The S&P/NZX 50 Index fell to a late morning low of 11,512.64 and recovered strongly in the afternoon to close at 11,590.47, up 19.25 points or 0.17%.

There were 87 decliners and 57 gainers over the whole market on volumes of 26.94 million share transactions worth $102.55m.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said: “So far, we’ve seen a volatile earnings season and Ebos returned some normalcy. But the market is very mixed, and we’ve seen some reduction in investor sentiment with hotter-than-expected inflation measures (particularly in the United States).”

Ebos Group increased 60c to $36.40 after reporting a 7.1% increase in revenue of $6.58 billion and 3% gain in net profit to $136.17m for the six months ending December. It is paying an increased interim dividend of 57c a share on March 22.

The healthcare business provided revenue of $5b, up 6.1% compared with the previous corresponding period, and animal care revenue was down 1.7% to $286.2m.

Ebos told the market it was confident about growing both divisions for the remainder of the 2024 financial year, and it will continue to service the Chemist Warehouse Australia till the expiry date of its deal on June 30.

Sullivan said the market had already priced in the loss of the Chemist Warehouse contract.

Ebos has an option to take full ownership of Transmedic within two years, and it has bought Superior, a leading manufacturer and supplier of premium dog rolls and treats. Transmedic is one of the largest independent medical device distributors in Southeast Asia with a presence in seven countries.

Not so sweet honey

Comvita, unchanged at $1.79, reported an 8% decline in half-year revenue to $103.36m and a net loss of $3.19m, which was already flagged to the market. It is paying an interim dividend of 1c a share on April 24.

Comvita told the market the result was impacted by weaker consumer sentiment in China and to a lesser degree in North America. Comvita was still a leader in five of its six key markets and the gross margin remained strong at 60%.

Ever-steady Colonial Motor Company hit a bump, falling 30c or 3.53% to $8.20 after half-year revenue was down 1.2% to $494.87m and net profit declined 35.2% to $9.26m. It is paying an interim dividend of 15c a share on March 25.

Colonial said light vehicle registrations were down 15% to 140,850 last year and the heavy truck market was up 7%. The company’s trading conditions had stabilised in January but “we remain cautious for the remainder of the financial year”.

Publisher and broadcaster NZME gained 4c or 4.17% to $1 after reporting a 5% decline in revenue to $347.64m and a 45% fall in net profit to $12.79m for the 12 months ending December. It is paying a final dividend of 6c a share on March 20.

NZME, which engages with more than 3.5 million people across NZ, said there are positive signs for 2024. January and February advertising revenues were pacing ahead of last year, business and consumer confidence was on upward trends, and the real estate market was recovering.

Trans-Tasman infrastructure maintenance group Ventia Services matched its high after gaining 4c to $3.60. Ventia reported a 9.8% increase in full-year revenue to $5.67b and a 12.5% rise in net profit to $202.1m. It has $18.1b of work in hand and is paying a final dividend of 9.41c on April 5.

Fisher and Paykel Healthcare was up 14c to $23.88; Tourism Holdings rebounded 8c or 2.35% to $3.48; Vital Healthcare Property Trust increased 5c or 2.35% to $3.48; Tower rose 3.5c or 5.26% to 70c; and Seeka improved 10c or 3.92% to $2.65.

In the energy sector, Meridian increased 13c or 2.33% to $5.70; Mercury gained 9.5c to $6.89; Genesis was down 4.5c to $2.525; and Manawa shed 6c to $4.13.

Freightways was down 10c to $8.26; Infratil declined 21c or 2.03% to $10.225; Restaurant Brands shed 14c or 3.87% to $3.48; SkyCity decreased 4c or 2.09% to $1.87; and PGG Wrightson shed 8c or 2.5% to $3.12.

MHM Automation will delist on March 6, the final day of trading is Friday, after being taken over by US-based Bettcher Industries at $1.70 a share.

Tags: Market Close