Market ends week down but Briscoe shares up despite lower earnings guidance
Leading retailer Briscoe Group downgraded its annual earnings by 10% on “continued subdued trading” as the New Zealand sharemarket ended a quiet week with a small fall.
Friday, January 10th 2025, 6:32PM
by BusinessDesk
The S&P/NZX 50 Index rose in the morning on Friday to 12,968.52 but fell in the afternoon and closed at 12,895.98, down 47.76 points or 0.37% on reasonable volumes of 18.34 million shares worth $81.3m.
The index has fallen 1.5% at the start of the new year after gaining 11.4% in 2024.
Shane Solly, portfolio manager with Harbour Asset Management, said critical economic data is coming up in the United States: the non-farm payrolls and consumer price index, as well as president-elect Donald Trump's inauguration and a meeting of the Federal Reserve.
“Investors are wary and standing off, so the markets are choppy on light volumes. The markets are waiting to see whether the data takes the heat off and the Federal Reserve continues to cut interest rates,” Solly said.
At home, Briscoe Group was up 2c to $5.04 despite downgrading its full-year net profit guidance to more than $66m, from the previous $70m-$77m, because of slower-than-expected trading in the crucial Christmas trading quarter.
In the nine weeks ending Dec 29, group sales were up 0.42%, homeware gained 0.82% and sporting goods was down 0.2%. For the 48-week period, group sales were down 0.28%, homeware decreased 0.29% and sporting goods eased 0.26% compared with the previous corresponding period.
Briscoe said finishing the year at 99% of the previous record full-year sales will be a significant achievement, and “we think that’s where we’ll be when our financial year ends on January 26”.
“While Christmas trading, particularly our Boxing Day promotions, improved compared to Black Friday, December trading was still under anticipated levels,” Briscoe said, believing the subdued trading will continue through January.
Matt Goodson, managing director of Salt Funds Management, said “if even the best of New Zealand retailers is finding it tough despite other signs of recovery in the economy, then the retail sector is still in a tough place".
In the retail sector, KMD Brands increased 2c or 4.76% to 44c; Michael Hill declined 2c or 3.13% to 62c; The Warehouse was down 1c to $1.01; and Hallenstein Glasson was unchanged at $8.33.
There were few moves among the leading stocks. Ebos Group was down 60c to $36.45; Westpac Bank declined 79c or 2.14% to $35.95; Infratil decreased 18c to $11.85; Chorus eased 9c to $8.65; Summerset shed 27c or 2.07% to $12.78; and Spark was down 5c or 1.71% to $2.88.
Fletcher Building was down 5c or 1.77% to $2.78; Marsden Maritime Holdings declined 7c or 2.11% to 32.5c; NZ King Salmon Investments shed 1c or 4.35% to 22c; and TradeWindow eased 0.005c or 2.38% to 20.5c.
Eroad fell 7c or 6.25% to $1.05; Fonterra Shareholders’ Fund was down 10c or 1.95% to $5.02; and Comvita declined 2c or 2.41% to 81c.
Skellerup Holdings was up 10c or 1.98% to $5.15; Delegat Group increased 13c or 2.68% to $4.98; and NZME added 2c or 1.89% to $1.08.
My Food Bag rose 2c or 9.76% to 22.5c; 2 Cheap Cars added 2c or 2.5% to 82c; Radius Residential Care increased 0.006c or 3.13% to 19.8c; Barramundi Fund gained 2c or 2.94% to 70c; and Marlin Global was up 2c or 2.15% to 95c.
Cancer diagnostic company Pacific Edge went into a trading halt to consider the long-awaited and crucial decision by Medicare consultant Novitas on continued reimbursement for the Cxbladder tests carried out in the United States. Pacific Edge last traded at 13.4c.
Pacific Edge expects to provide a update before the market opens on Monday. But it's understood the determination does not favour Pacific Edge on receiving Medicare reimbursement for its bladder tests.
Goodson said the determination on the Novitas website reiterates that Novitas continues to have issues with the Pacific Edge tests and confirms its original finding that the tests should not be covered by Medicare.
“What Pacific Edge needs to do now is get into the American Urological Association’s standard of care guidelines. They have significant studies coming out, and we may see a reconsideration [of the determination].”
Solly said Pacific Edge needs to reset its business. It has $30m in cash and that gives the company some leeway.
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