More than $1b traded on NZ sharemarket as it rises again

A solid six-month financial result from Turners Automotive provided the New Zealand sharemarket with more confidence and strength, though Air NZ has downgraded its first-half earnings guidance.

Monday, November 25th 2024, 6:41PM

by BusinessDesk

Midday was again the touchpoint for the S&P/NZX 50 to climb higher and the index closed at 13,196.08, up 154.18 points or 1.18% after reaching a morning low of 12,942.66. The index has risen 3.35% in the last two trading days.

The market, in the end, was dominated by massive late trading on the last day of the November quarterly review for the MSCI global indices, with Infratil going into the World Large Cap Index and Spark being removed.

Trading was extended as 335.4 million shares worth $1.93 billion changed hands. Infratil gained 17c to $12.90 on trade worth $1.01b (78.2 million shares) and Spark was down 10.5c or 3.41% to $2.975 on trade worth $540.56 million (181.44 million shares).

Turners Automotive increased 32c or 6.72% to $5.08 after reporting revenue of $208.55m, down 2%, and net profit of $19.3m, up 4%, for the six months ending September. It is paying an interim dividend of 7c a share on January 29.

Turners said with signs that auto retail was through the sharp pricing contractions of March to August – “one of the deepest downturns in New Zealand retail” – the second half of the 2025 financial year offers more positive trading and margin conditions.

Interest rate deductions are becoming a tailwind for the finance division with net interest margin rebuilding and arrears of 2.8% performing significantly better than the market level of 6.4%. Turners said it was on track for another record full-year result with net profit exceeding the $50m target.

Matt Goodson, managing director of Salt Funds Management, said the Turners result showed a degree of relief that the very tough business conditions in the past two quarters did not weigh too heavily on its numbers.

“We have now been getting signs from companies that second-half trading is looking more positive after the very weak September quarter, and we may have seen the bottom in the economy,” Goodson said.

Energy shines

The energy sector had a strong day, with Mercury powering ahead 16c or 2.4% to $6.83; Meridian gaining 14c or 2.38% to $6.02; Contact adding 13c or 1.96% to $8.80; and Genesis rising 10c or 4.42% to $2.36.

Market leader Fisher and Paykel Healthcare increased 66c or 1.71% to a recent new high of $39.21 on trade worth $75.7m.

Auckland International Airport was up 29c or 3.74% to $8.05 on trade worth $98.29m; Serko gained 16c or 4.09% to $4.07; Vulcan Steel collected 17c or 2.11% to $8.22; AFT Pharmaceuticals rose 21c or 7.75% to $2.92; Fletcher Building added 10c or 3.17% to $3.25; and Sanford was up 14c or 3.37% to $4.29.

Air NZ was up 1.5c or 2.8% to 55c after downgrading its first-half earnings guidance to $120m-$160m, compared with $185m in the first half of the previous financial year.

The national airline said there are early signs of recovery in corporate travel, but government travel demand remains subdued. Aircraft availability remains an issue until early 2026 because of global engine maintenance delays, and 16% of Air NZ’s fleet has been out of service during the first half.

Goodson said the Air NZ update was better than had been feared – it was well-known that the airline had a real issue with aircraft availability.

Scott Technology increased 12c or 5.38% to $2.35 after forming a partnership with Kinross Gold Corporation to enhance the processing at the Fort Knox mine in Alaska – the first step is developing an automated and adaptable crushing platform.

Kiwi Property, down 3.5c or 3.65% to 92.5c, reported a 9% increase in total revenue to $128.36m and 218.4% rise in net profit to $43.22m. Kiwi is paying a second-quarter dividend of 1.35c a share on December 20, making a half-year payout of 2.7c.

Kiwi has made an investment in Mackersy Property, with more than $2b in real estate assets under management, through a $6.5m convertible note. When converted Kiwi will have a 50% shareholding.

Amongst other property stocks, Goodman Trust was up 5c or 2.37% to $2.16 and Investore gained 2c or 1.74% to $1.17; Gentrack fell 76c or 6.97% to $10.14; Eroad declined 5c or 5.21% to 91c; and Foley Wines decreased 4c or 5.8% to 65c.

Synlait Milk, up 0.005c to 41c, increased its forecast farmgate milk price for the 2024/25 season to $9.50 per kgMS, up from $9, because of stronger commodity prices.

Channel Infrastructure went into a trading halt after announcing a $50m capital raise to fund a bitumen import terminal for Higgins under a 15-year contract worth $45m in revenue. Channel last traded at $1.78.

Tags: Market Close