Spark's continuing slide helps drive NZ sharemarket down 0.8%, over 7% for the year
Leading telco Spark continued its slide, with a2 Milk hitting a four-year high, Smartpay having two takeover bids, and the New Zealand sharemarket starting the new week with a 0.8% fall.
Monday, March 17th 2025, 6:26PM
by BusinessDesk
The S&P/NZX 50 Index was weaker in the afternoon and closed at 12,166.14, down 100.11 points or 0.82%. The index is down more than 7% for the year.
There were 44.3 million share transactions worth $157.8m.
'Patchy'
Matt Goodson, managing director with Salt Funds Management, said it was generally expected “we would see an advance on the back of strong US markets, but our market was patchy with some serious volumes in a couple of stocks – Spark being the stand-out”.
Spark fell 10c or 4.63% to a 14-year low of $2.06, with 10.9m of its shares worth $22.6m changing hands.
Goodson said Spark is facing continued selling pressure from a succession of weak financial results, and its balance sheet is “starting to become a touch geared.
“S&P Ratings has put Spark on a negative watch, and if it goes below A minus, that would increase the cost of new debt. Spark is a business that’s been struggling, and it has targeted significant cost cuts,” he said.
Global marketer a2 Milk was up a further 27c or 2.86% to $9.72, its highest since February 2021 but still some distance from its July 2020 peak of $20.84. The infant milk formula supplier is benefitting from China’s moves to support families having children.
Merchant services company Smartpay surged 22c or 34.92% to 85c after confirming two conditional takeover bids – one from Australian competitor Tyro Payments at $1 a share and the other from an undisclosed international party.
Smartpay, which operates Eftpos machines, has granted the bidders due diligence, but it will also review Tyro, given that the majority of the offer involves issuing Tyro shares plus a cash payment.
Goodson said Smartpay has significant synergies with Tyro, and a deal potentially makes sense.
In the United States, the Dow Jones Industrial Average bounced back 1.65% to 41,488.19 points at the weekend (NZ time), while the S&P 500 increased 2.13% to 5,638.94 and the Nasdaq Composite rose 2.61% to 17,754.09.
Local stocks
Back home, Meridian Energy was down 13c, or 2.37%, to $5.35 following a softer operating report. Meridian said national hydro storage declined from 91% to 76% of the historical average in the month to March 10, with the South Island at 72% and the North Island at 103%.
National electricity demand in February was 5.2% lower than last year's, and Meridian’s retail sales volumes decreased 1.9%.
Elsewhere in the energy sector, Contact decreased 19c or 2.16% to $8.60; Mercury was down 7c to $5.62; Genesis shed 5c or 2.2% to $2.22; and Manawa decreased 9c or 1.84% to $4.80.
Auckland International Airport declined 17c or 2.1% to $7.93 after reporting a 4% decline in total passengers in February. International passengers totalled 844,387, down 3.2%, and domestic 691,255, down 5% – representing 93% of pre-covid activity.
Ebos Group shed 55c to $37.10 after telling the market it was not considering buying Real Pet Food as speculated in the Australian media.
Freightways eased 24c or 2.17% to $10.80; Serko was down 13c or 3.32% to $3.79; Westpac decreased 64c or 1.91% to $32.83; Sky TV shed 7c or 2.81% to $2.42; Port of Tauranga declined 14c or 2.11% to $6.48; and SkyCity was down 3c or 2.38% to $1.23.
Retirement village operators Summerset was up 18c to $11.86, and Ryman Healthcare was down 11c or 3.78% to $2.80 after only 42% of shareholders took up the retail offer in its $1 billion capital raise.
The property sector was weaker. Precinct was down 3c or 2.58% to $1.135; Vital Healthcare Trust shed 4c or 2.2% to $1.78; Kiwi decreased 2xc or 2.22% to 88c; and Property for Industry declined 4c or 1.87% to $2.10.
Fletcher Building increased 7c or 2.18% to $3.28; NZME gained 3c or 2.59% to $1.19; Blackpearl Group rose 5c or 6.67% to 80c; and Colonial Motor was up 20c or 2.99% to $6.90.
Infratil added 22c or 2.17% to $10.38 after telling shareholders in its newsletter that the performances of CDC datacentres and One NZ (formerly Vodafone) were on track.
Goodson said that given Spark’s issues, Infratil’s reassurance on One NZ was a relief for investors.
NZ King Salmon Investments declined 3c or 11.54% to 23c after reporting higher than expected sea farm mortality, coupled with lower than anticipated growth rates.
The latest mortality rate, significantly lower than in late 2022/early 23, will impact the harvest and profitability in the 2026 financial year, with an estimated 5,900-6,300 metric tonnes and operating earnings (ebitda) of $15m-$24m. The guidance of $26m-$30m for the 2025 financial year will not be affected.
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