NZ sharemarket stuck in negative territory ahead of Easter weekend

Two small-cap stocks, Savor Group and New Zealand King Salmon Investments, staged strong earnings turnarounds, but the NZ sharemarket remained stuck in negative territory.

Wednesday, March 27th 2024, 6:36PM

The S&P/NZX 50 Index had a topsy-turvy day, trading between 11,981.55 and 12,035.77 before closing at 12,010.66, down 21.15 points or 0.18%.

There were 73 gainers and 66 decliners over the whole market on volumes of 34.29 million share transactions worth $141.48m.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said it was good to see a couple of upgrades on the NZX.

“The turnarounds by Savor and NZ King Salmon will be pleasing for shareholders. Apart from the stand-outs of the two smaller caps, the market was quiet and is still looking to interest rate cuts as a key catalyst,” he said.

The government’s budget policy statement had little impact on the market, despite finance minister Nicola Willis suggesting that the books won’t be back in surplus by 2026/27 as expected and the tax cuts may not be at the same levels that National campaigned on.

Willis indicated that the operating allowance for Budget 2024 will be less than the $3.5 billion signalled at the half-year fiscal update.

An interim update to the Treasury’s economic outlook pointed to a much smaller nominal economy over the next four years and less tax revenue of some $14b.

ANZ Research said: “Our attempts to net out the weak economic signal with today’s discretionary policy suggests bond issuance could be upgraded by around $10b-12b over the next four years come Budget.”

Hospitality group Savor surged 7c or 36.84% to 26c after telling the market it expects increased revenue of more than $60m ($52m in the 2023 financial year) and operating earnings of $8.5m-$9m for the 12 months ending March.

Savor said it will begin utilising the significant balance of historical tax losses and net profit is expected to be $1.5m-$2m. The company has organised new banking arrangements with ANZ.

NZ King Salmon Investments, up 1c or 3.85% to 27c, reported a 12% increase in revenue to $187.1m and a rise in net profit from $1.9m to $28.45m for the 12 months ending January.

The salmon farmer harvested 6,238 metric tonnes compared with 6,014 tonnes in the previous year, and mortality expenses fell from $25.9m to $12.6m. NZ King is forecasting operating earnings (Ebitda) of $26m-$32m for the 2025 financial year compared with $24.5m last year.

A market leader Ebos Group declined 45c to $33.85 and has fallen more than 25% over the last 12 months.

Skellerup Holdings fell 19c or 4.26% to $4.27; Tourism Holdings was down 11c or 3.49% to a six-month low of $3.04; Serko declined 7c or 1.82% to $3.78; and Arvida Group decreased 2c or 1.83% to $1.07.

In the energy sector, Manawa rose 16c or 3.57% to $4.64; Genesis increased 6c or 2.5% to $2.46; Meridian was up 5c to $5.90; and Mercury was down 9c to $6.71.

In the property sector, Goodman Trust was down 5.5c or 2.41% to $2.23; Kiwi shed 2.5c or 2.94% to 82.5c; and Argosy declined 2c or 1.72% to $1.14;

NZME was down 2c or 2.25% to 87c; Allied Farmers fell 5c or 6.25% to 75c; and Green Cross Health was down 2c or 1.92% to $1.02.

Other decliners were Enprise Group shedding 1.5c or 3.03% to 48c; ikeGPS down 2c or 4.76% to 40c; and Foley Wines declining 3c or 2.86% to $1.02.

Restaurant Brands rose 32c or 9.7% to $3.62; Freightways collected 12c to $8.57; Vulcan Steel gained 20c or 2.25% to $9.10; Comvita rebounded 4c or 1.96% to $2.08; and Synlait Milk added 3c or 4.17% to 75c.

NZ Rural Land was up 2c or 2.22% to 92c; CDL Investments gained 2c or 2.56% to 80c; NZ Oil & Gas increased 3c or 7.41% to 43.5c; and 2 Cheap Cars added 2c or 2.6% to 79c.

Kingfish, which invests in NZ stocks, celebrated 20 years as a listed company by gaining 1c to $1.23. Over that period Kingfish has had a total shareholder return of 9.4% a year.

Tags: Markets