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MARKET CLOSE: NZ shares gain with Metlifecare, Chorus; NZ Refining, Genesis, Intueri fall

Tuesday 28th February 2017

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New Zealand shares rose, led by Metlifecare and Chorus, while NZ Refining and Genesis Energy dropped after reporting earnings and Intueri Education Group sank 25 percent on confirmation of loss of its Australian status.

The S&P/NZX 50 Index gained 88.28 points, or 1.2 percent, to 7,167.46. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $199 million.

Metlifecare led the index, up 3.3 percent to $6.04. Yesterday, it reported a 31 percent jump in first-half profit that was aided by a gain in the value of its property, while chief executive Glen Sowry cited strong demand for its units and an occupancy rate that has edged up to 97 percent.

Chorus gained 3.2 percent to $4.14, Ryman Healthcare rose 3.1 percent to $8.87, and Trustpower advanced 2.7 percent to $4.60.

New Zealand Refining was the worst performer, down 2.9 percent to $2.70. Annual profit sank 69 percent to $47.2 million from a record a year earlier, with margins significantly lower than 2015 when low global oil prices bolstered earnings, despite the oil refinery operator's efforts to improve profitability in the second half.

"It's within guidance, so I don't think there's any surprises there - maybe the dividend was slightly less than was expected by the market. If you look through their financials their cash on hand has reduced, they are talking about further maintenance as well which could impact on the dividend," McIntyre said. "We've seen an uptick in the Singapore margin which bodes well for the first half of 2017. It's had a reasonable run in to the result, maybe it's a bit of profit taking or some parts of the market are thinking there are better places to invest, but it looks positive for NZ Refining."

Genesis fell 1.6 percent to $2.095. The country's biggest electricity retailer posted an 11 percent decline in first-half earnings as cheap oil and a wet spring kept wholesale prices low, offsetting better margins on the retail side of the business. 

"The key factor for that was lower oil prices impacting on wholesale revenues, and warmer weather having an impact as well. I think the market is a bit disappointed with the dividend - they have good free cash flow but the company has been touted as one that's going to have a progressive dividend into the future, ie an increasing dividend, and maintaining that dividend may have surprised the market," McIntyre said. "They lost 8,000 electricity customers into the half year, which is a significant number."

Scales dropped 0.3 percent to $3.49. New Zealand's biggest apple exporter boosted profit 6 percent to $38.2 million as it benefited from expanding its business.

"They've delivered another great result, particularly in the horticulture and food ingredients divisions. Probably the soft spot was cold storage, where their ebitda was down 7 percent," said Peter McIntyre, investment adviser at Craigs Investment Partners. "They're a company that tends to over deliver, so the market was probably expecting this result. There's obviously institutions there trimming back their position, but I think the share price has held up remarkably well given the volume that's trucked through today."

Outside the benchmark index, Intueri plunged to 1.2 cents. The ailing private training provider will lose its Australian registration in late March, earlier than its planned exit by the end of the year. The Australian Skills Quality Authority will cancel the registration of Intueri's Conwal & Associates and Online Courses Australia colleges from March 29. The shares have slumped 96 percent over the past 12 months, valuing the company at just $1.2 million.

Veritas Investments gained 11.1 percent to 30 cents. It will book after-tax losses of between $2.2 million and $2.6 million on the sale of its upmarket Nosh supermarkets in its annual accounts, which it anticipates will bolster underlying earnings for the year, having returned to the black in the first half.

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