F&P Healthcare, Mainfreight gains not enough to lift NZ sharemarket

Heavyweights Fisher & Paykel Healthcare and Mainfreight made gains with pleasing annual results, but they weren’t enough to lift the New Zealand sharemarket higher.

Wednesday, May 29th 2024, 6:47PM

by BusinessDesk

The S&P/NZX 50 Index had a sharp fall in the end-of-day matching session and closed at 11,678.68, down 3.83 points or 0.03% after reaching an intraday high of 11,757.9.

There were 58 gainers and 75 decliners over the whole market on volumes of 32.63 million share transactions worth $139.11m.

Across the Tasman, the S&P/ASX 200 Index had fallen 1.18% to 7675.4 points at 6pm NZ time after the latest inflation rate, at 3.6%, was higher than the expected 3.4% and dimmed hopes of an interest rate cut this year.

Fisher and Paykel Healthcare increased $1.09 or 3.94% to $28.75 on trade worth $19.22 after reaching an intraday high of $29.73.

The medical devices supplier told the market it has “returned to a trajectory of growth … all the right foundations are in place for future success”.

Fisher & Paykel reported a 10% increase in revenue to $1.742 billion and net profit of $132.6m, down 47%, for the year ending March.

The underlying profit was $264.4m, up 5%. It is paying a final dividend of 23.5c a share on July 10. The net profit fell on the revaluation of its Karaka land, deferred tax on the removal of building depreciation, and $20m provision for a product recall.

Revenue for the hospital product division increased 6% to $1.1b, and homeware was up 18% to $652.3m. Gross margin improved 1.16% to 61.1%.

Fisher and Paykel forecast revenue of $1.9b-$2b and net profit of $310m-$360m for the 2025 financial year.

Matt Goodson, managing director of Salt Funds Management, said there were no shocks in the Fisher and Paykel result. Global investors drive the stock, and “some of them must have been bullish, thinking the company will get to the upper end of its forecast”.

Mainfreight was up $1.60 or 2.35% to $69.60 after reporting full-year revenue of $4.72b, down 17% and net profit of $395m, down 33%. It is paying a final dividend of 87c a share on July 19.

The result was as expected, but Mainfreight told the market: “We should have performed better.” Trading improved in NZ and Australia during the second half, but Asia, the United States and Europe continued to be weak.

Revenue for the Americas division was down 33.4% to US$639.1m (NZ$1.01 billion), and profit fell 75.6% to US$21.8m.

Goodson said the company’s outlook was typically cryptic – ‘its current trading is satisfactory’ – and the strength of the business will outweigh the challenging background”.

The price of milk

Fonterra Shareholders’ Fund rose 12c or 3.23% to $3.83 after the dairy co-operative lifted its farmgate milk price for the 2024-25 season to $8 per kg/MS, from the present $7.80, as supply and demand remain finely balanced and China imports stagnate.

Fonterra reported a nine-month net profit of $1.013b, up $20m on the previous corresponding period, and lifted its full-year earnings range to 60-70c a share, up from 50-65c.

Sanford was up 5c to $4.03 after reporting steady revenue of $275.98m and a 45.41% increase in net profit to $16.15m for the six months ending March. Gross margin improved to 25% from 21%, and Sanford is paying an interim dividend of 5c a share on June 1.

Comvita gained 4c or 2.21% to $1.85; PGG Wrightson rebounded 4c or 2.56% to $1.60; Eroad improved 2c or 2.06% to 99c; and Serko increased 11c or 3.62% to $3.15.

Rakon shed 2c or 2.3% to 85c after reporting full-year revenue of $128m, down 29%, and net profit of $4.51m, down 81%. Rakon was affected by the slowdown in 5G deployment by mobile operators.

The retail sector was weaker following the news that Auckland department store Smith & Caughey was closing. Briscoe Group declined 13c or 2.92% to $4.33; Hallenstein Glasson was down 9c to $5.54; KMD Brands shed 1.5c or 3.41% to 42.5c; and Michael Hill decreased 2.5c or 4.9% to 48.5.

There was profit-taking in a2 Milk, down 31c or 3.9% to $7.64; Fletcher Building eased 6c or 1.95% to $3.02; Ryman Healthcare declined 10c or 2.7% to $3.61; Oceania Healthcare decreased 3c or 5.08% to 56c; and Skellerup shed 11c or 2.85% to $3.75.

Tags: Market Close