NZ sharemarket falls 1.2% despite F&P's record result

Record half-year revenue from heavyweight Fisher and Paykel Healthcare couldn’t stop the New Zealand sharemarket falling more than 1%, while Ryman Healthcare again disappointed investors.

Thursday, November 28th 2024, 6:28PM

by BusinessDesk

Following a down day on Wall Street, the S&P/NZX 50 Index fell at the opening and traded on a reasonably flat line to close at 13,053.56 points, down 159.36 points or 1.21%.

There were 33.83 million share transactions worth $135.94m.

'Writing is on the wall'

Market leader Fisher and Paykel Healthcare declined 57c to $37.85 after reporting revenue of $951.2m, up 18%, and net profit of $153.2m, rising 43%, for the six months ending September. It is paying an interim dividend of 18.5c a share on Dec 18.

Hospital respiratory product revenue increased 21% to $591.4m, and homecare obstructive sleep apnea product was up 14% to a record $359.4m.

Fisher and Paykel said the half-year result was driven by new products and hospitals returning to more normalised staffing and capacity. Fisher and Paykel confirmed full-year operating revenue guidance at $1.9 billion to 2b and net profit at $320m to $370m.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said Fisher and Paykel’s result was fantastic, and the stock has had a good run.

However, the impact of tariffs on the United States-imported goods was on investors’ minds.

“Fisher and Paykel was pretty mum on the subject and would rather wait and see than speculate. The writing is on the wall with the company having factories in China and Tijuana, Mexico – but it doesn’t intend using the Chinese facility for US exports,” said Sullivan.

'Voted with their feet'

Ryman Healthcare was down 32c or 6.37% to $4.70 after reporting a 9.8% increase in revenue to $366.26m and net profit falling by a half to $94.36 for the six months ending September. Ryman continues to waive a dividend.

Sales of occupation right agreements were up 5% to 827 – the strongest six-month period in three years – with resales increasing 9% to 603 and new sales down 5% to 224.

Ryman expected negative free cash flow of $50-$100m as settlements are deferred to the 2026 financial year (previous guidance was positive free cash flow), and it is still planning to deliver the top-end of the previously indicated 850-950 retirement village units and aged care beds.

The country’s leading retirement village operator reduced its capital expenditure guidance to $625m-$675m from $700m-$820m.

Sullivan said Ryman had reasonable revenue growth, but the cash flow was negative through deferred settlements, which weighed on the stock.

“As long as that remains, the bigger chance of a capital raise and shareholders don’t want to be diluted further. They voted with their feet today.”

Other stocks

Mercury Energy, declining 27c or 3.9% to $6.66, and Auckland International Airport, decreasing 22c or 2.68% to $8, led the market down.

Infratil eased 19c to $12.76; Fletcher Building shed 8c or 2.5% to $3.12; Freightways decreased 15c to $10.35; Genesis Energy declined 6c or 2.56% to $2.285; and Mainfreight was down $1.20 or 2% to $73.50.

Vista Group declined 13c or 4.41% to $2.82; Heartland Group eased 2c or 2.04% to 96c; Rakon was down 4c or 6.25% to 60c; Bremworth fell 6.5c or 14.61% to 38c; South Port NZ shed 15c or 2.8% to $5.20; and Pacific Edge retreated 1.13c or 9.42% to 12.5c.

Napier Port shed 5c or 2% to $2.45; Serko decreased 7c or 1.84% to $3.73; Smartpay declined 6c or 9.45% to 57.5c; Property for Industry eased 4c or 1.83% to $2.15; and Being AI fell 5.5c or 12.36% to 39c.

Meridian Energy was up 11c or 1.79% to $6.2; Gentrack climbed a further 55c or 4.23% to $13.55; Scott Technology added 7c or 2.98% to $2.42; T&G Global gained 4c or 2.76% to $1.54; Vulcan Steel collected 17c or 2.06% to $8.42; and Comvita rebounded 4c or 4.21% to 99c.

Insurer Tower was up 3c or 2.29% to $1.34 after reporting a strong full-year result, with revenue increasing 17% to $562.41m and the bottom line turning around from a $1m net loss in the previous corresponding period to a net profit of $74.28m. It is paying a final dividend of 6.5c a share on Jan 30.

Gross written premiums reached $595m, up 15%, and Tower said the results were due to no large (adverse) events and operational and digital efficiencies. Tower is returning $45m to shareholders through a buy-back and confirmed its full-year net profit guidance of $50m-$60m.

Green Cross Health increased 6c or 7.5% to 86c on an improved half-year, with revenue up 3.9% to $259.87m and net profit up 0.7% to $5.64m. It is paying an interim dividend of 2.5c a share on December 18.

TruScreen, up 0.001c or 4.71% to 2.5c, is launching a five-year cervical cancer screening programme with the Ho Chi Minh Public Health Association, involving 260,000 women.

Tags: Market Close