NZ sharemarket flat as earning season rolls on

The New Zealand sharemarket was marginally down to start the week as investors digested another set of corporate earnings.

Monday, February 26th 2024, 6:26PM

by BusinessDesk

The S&P/NZX 50 Index closed at 11730.88, down 9.931 points or 0.08%. There were 72 gainers and 71 decliners over the whole market on volumes of $32.6 million share transactions worth $105.8 m.

“[Monday] was another day in the red,” Forsyth Barr investment advisor David Price said, speaking to BusinessDesk just before the day’s close. “Volumes were all right, but there was not much green on the screen.” Investors are also awaiting this Wednesday's monetary policy decision by the Reserve Bank of NZ (RBNZ). The official cash rate (OCR) is currently at 5.50%, and while most economists expect it to remain on hold, at least two banks are predicting a 25 basis point rate hike to 5.75%.

Earnings season continues

The big gainer of the day was Summerset with its share price rising 3.44% to $11.12.

NZ’s second-largest listed retirement village owner-operator reported an increased bottom-line profit by 62% to the NZ stock exchange (NZX).

“It is all about their improved margins,” Price said, adding the company has been outperforming its leading competitor, Ryman Healthcare, in recent months, which fell almost 12% to a near 12-year low early last week.

After some recovery since then, Ryman Healthcare’s plight continued on Monday. The company’s shares declined 1.78% to $4.60.

After spending most of Monday down, KFC, Pizza Hut, Carl’s Jr and Taco Bell operator Restaurant Brands share price increased slightly by 0.3% to $3.50 despite reporting a 49.3% profit loss compared with the previous financial year.

Margins in all regions – NZ, Australia, Hawaii and California – which were hit heavily by inflation and minimum wage rises, were showing signs of recovery, the company said.

Chief executive Arif Khan told BusinessDesk he was “very pleased” with the second half of the year after inflation ate into profits in the six months to June.

Likewise, Property for Industry got off largely scot-free after a weak result. The warehouse and logistics specialist recorded a $97.8 million net loss after tax in its latest year following portfolio devaluations. At closing, the company was down only 0.22% to $2.22.

The market responded less favourably to Michael Hill International’s earnings. The jewellery retailer fell 4.82% to $0.79 off the back of some disappointing margins reported in its half-yearly results.

In other news

Meanwhile, the market responded well to Goodman Property Trust’s announcement that it will pay $290m to its Australian-listed management company and shareholder Goodman Group to internalise its management function.

The company’s shares were trading at $2.17, up 2.6%.

NZ energy companies Mercury, Genesis and Meridian were down 1.0%, 1.78% and 1.53%, respectively.

Mercury and Genesis traded in low volumes, while Meridian was the highest traded stock, reaching nearly $10m by close.

Shares in Fletcher Building were the second highest traded of the day. The share has recovered from its recent low of $3.35. It rose 1.32% to $3.85 in Monday’s trading.

Forsyth Barr's Price said investors are buying back into Fletcher’s after they “threw the baby out with the bathwater” over the last couple of weeks.

Tags: Market Close