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MARKET CLOSE: NZ shares at fresh high, Vector, A2 gain while Pushpay, Comvita drop

Tuesday 21st August 2018

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New Zealand shares inched to a fresh record ahead of tomorrow's bumper results day, led higher by Vector and A2 Milk Co.

The S&P/NZX50 Index rose 6.63 points, or 0.07 percent, to 9,115.78. Within the index, 21 stocks rose, 21 fell and eight were unchanged. Turnover was $106.8 million.

Vector led the index higher, up 2.7 percent to $3.37. A2 Milk Co rose 1.8 percent to $11.13 ahead of its earnings announcement tomorrow, while NZX gained 1.8 percent to $1.12.

Also due to report earnings tomorrow are Meridian Energy, which rose 1.3 percent to $3.25; Trade Me, which rose 0.2 percent to $4.71; Spark New Zealand, which fell 0.3 percent to $3.98; and Fletcher Building, which dropped 1.4 percent to $6.90. 

Westpac Banking Corp was the worst performer, down 2.3 percent to $32.50.

Comvita dropped 0.9 percent to $5.65. It turned to a full-year operating profit from a loss a year earlier and said it has a positive outlook for the current financial year as it invests in mānuka honey supply. New Zealand's only listed honey company posted an after-tax operating profit of $9.3 million in the year ended June 30, within its forecast range of $8 million-to-$11 million, and marking a turnaround from a loss of $5.5 million in the year-earlier period.

"It was pretty much within expectations, I don't think there was too much in way of surprises - it was never going to be fantastic," said Grant Williamson, director at Hamilton Hindin Greene. "Probably slightly lower end of the guidance range, it was just another bad honey season." 

Mercury New Zealand dipped 0.2 percent to $3.405. It reported a record $561 million in operating earnings on the back of record generation and high wholesale power prices.

The company, the country’s third-largest power and gas retailer by accounts, reported a 27 percent increase in net profit to $234 million for the year ended June 30, from $184 million a year earlier. Earnings before interest, tax, depreciation, amortisation and changes in financial instruments rose to a record $561 million, up 7 percent from $523 million a year earlier.

"Not much in way of surprises there, but a very strong result," Williamson said. "The shareholders will be pretty happy though there has been no strong buying today. They certainly met expectations, maybe slightly exceeded but it's not enough to get people buying."

Pushpay Holdings fell 1.7 percent to $3.41. The stock has dropped 18 percent since Aug. 1, when the company delivered first-quarter revenue within guidance and reshuffled its senior management after another abrupt executive exit.

"The share price has certainly been under a bit of pressure, although it did go up pretty strongly throughout most of 2018," Williamson said. "It's still well up for the year, but maybe expectations got a little carried away."

Outside the benchmark index, SeaDragon was unchanged at 3 cents. The struggling fish oil manufacturer is calling on its shareholders to pay a 10 percent premium to participate in a $14.9 million pro-rata renounceable offer to help it stay afloat. 


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