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MARKET CLOSE: NZ shares rise, led by Sanford, Metro Glass gain; Fletcher extends slide

Thursday 15th February 2018

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New Zealand shares rose, led higher by Sanford and Metro Performance Glass, with Fletcher Building extending its slide after yesterday's selloff.

The S&P/NZX50 Index gained 4.54 points, or 0.06 percent, to 8,063.33. Within the index, 24 stocks rose, 19 fell and seven were unchanged. Turnover was $132.6 million.

Sanford led the index up 4 percent to $7.88, with Metro Performance Glass rising 3.5 percent to 88 cents and Australia & New Zealand Banking Group gaining 2.3 percent to $30.28.

The worst performer was Genesis Energy, down 1.7 percent to $2.35, with Fonterra Shareholders Fund dropping 1.6 percent to $6.01.

Fletcher Building fell 1.3 percent to $6.96. The stock dropped 9.3 percent yesterday after the company took a further $486 million provision for project losses at its B+I unit and said 14 of the unit's 73 projects, worth $2.3 billion, are loss-making or 'on watch'. It said it has obtained a waiver from its commercial banking syndicate after breaching the terms of its loans, and aims to finish renegotiations by the end of March. 

The stock had fallen as far as $6.91 in intraday trading, but recovered somewhat by the close. It's now at a two-month low.

"It is certainly not blood on the streets today like some had predicted," said Grant Davies, investment advisor at Hamilton Hindin Greene. "We do also need to take into account that the NZX 50 was down a couple of days while Fletcher Building was in a halt, so it is catching up."

"What they have been saying has given the market confidence - they're just focussing on getting the existing projects out of the way and investors are looking at the parts of the business which are a bit more attractive, their building materials and distribution network, those are the highly profitable parts of the business," Davies said. "The last two years have been bad, but even the year before wasn't a stellar performance from Building + Interiors."

Outside the benchmark index, Skellerup Holdings rose 5 percent to $1.89. The shares jumped to a record $1.95 on intraday trading after the rubber goods manufacturer lifted first-half profit 31 percent thanks to a "standout" performance from its industrial unit which boosted earnings 40 percent.

Profit rose to $11.7 million, or 6.06 cents per share, in the six months ended Dec. 31, 2017, from $8.9 million, or 4.63 cents, in the year-earlier period, the Auckland-based company said in a statement. Revenue rose 20 percent to $116.7 million. The company forecast full-year profit of between $24.5 million to $26 million, up from $22.1 million last year. 

Carpet maker Cavalier Corp gained 7.1 percent to 45 cents. It reported an improved first-half net profit on better margins, after restructuring the business to reduce costs and introduce a more efficient manufacturing system.

Net profit rose to $1 million, or 1.5 cents per share, in the six months ended Dec. 31, from $31,000 in the prior period. Revenue fell to $75.3 million from $84.3 million, reflecting reduced carpet sales in the first half due to market conditions as well as the materially lower wood prices which impacted the revenue of its wool buying business Elco Direct. 

On the NXT market, QEX Logistics shares jumped 58 percent to 39.5 cents, from their listing price of 25 cents, on their debut to the small-cap NXT market in the first new listing of 2018. 

The shares joined the NXT market, most likely consigned to the dustbin if NZX goes ahead with plans to merge its three equity bourses, in a compliance listing today. The stock first traded at 45 cents.


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