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MARKET CLOSE: NZ shares up, led by NZ Refining and Port of Tauranga; Sky TV falls on writedown

Friday 24th August 2018

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New Zealand shares rose, led by New Zealand Refining Co and Port of Tauranga. Sky Network Television dropped back after it turned to a loss in 2018.

The S&P/NZX50 Index gained 19.76 points, or 0.2 percent, to 9,159.63. Within the index, 26 stocks rose, 18 fell and six were unchanged. Turnover was $136 million.

New Zealand Refining was the best performer, up 3.6 percent to $2.60. The company, which yesterday reported a $2.8 million loss for the six months through June 30, paid a half-year dividend and forecast record production in 2019 amid strong on-going margins. 

Port of Tauranga rose 3 percent to $4.90. New Zealand's biggest port operator posted a 13 percent rise in annual profit to $94.3 million, driven by record cargo volumes, and plans further capacity expansion. The company will pay a final ordinary dividend of 7 cents per share, and a further special dividend of 5 cents a share.

"That was a standout. Their profit was in line with our expectations but the mix of cargoes was slightly different," said Greg Easton, investment adviser at Craigs Investment Partners. "The slight surprise was another special dividend."

Trade Me Group, which declared its a 22 cents per share special dividend on Wednesday, rose 2.6 percent to $5.23. The online auction company's shares have gained 11 percent since it reported annual revenue of more than $250 million for the first time. June year net profit rose 3.9 percent to $96.6 million.

Metlifecare rose 2.5 percent to $6.254, and NZX gained 1.8 percent to $1.11.

Sky Network Television fell 3.4 percent to $2.56. The pay-TV provider wrote down its value by $360 million, resulting in a $240.7 million annual loss. 

Sky wrote down the value of its goodwill to $1.07 billion from $1.43 billion. Excluding the writedown, underlying profit for the June year rose 2.6 percent to $119.3 million. Sales revenue fell 6 percent to a six-year low of $839.7 million.

"It wasn't all bad. The headline number obviously reflected just how far behind they are in respect of technology," Easton said. "They have slowed the shrinkage of the client base, obviously repacking the basics package into those cheaper options has worked.

"They're facing global giants and even locally, with Spark putting up contest for sporting contracts," Easton said. "Sky's real strength is still that they're a proven broadcaster, particularly of sport, and that they've got the content which is what people really want - they don't care how they get it, they want the content."

Vector dropped 3 percent to $3.26. It reported flat operating earnings for the year ended June, with growth in its smart meter business and a better performance in gas unable to offset higher costs in its electricity distribution arm.

Westpac Banking Corp fell 1.7 percent to $30.55, Heartland Bank dropped 1.7 percent to $1.74 and Goodman Property Trust fell 1.7 percent to $1.465.

Infratil dipped 0.4 percent to $3.43. The infrastructure investor sees earnings in the current financial year "bouncing around the top end of guidance" of between $500 million and $540 million, chief executive Marko Bogoievski told the company's annual meeting in Wellington.

Outside the benchmark index, IkeGPS surged 14 percent to 57 cents. The company raised $5 million in an oversubscribed share placement at 52 cents per share. The capital will be used in an effort to accelerate growth for its new project and smooth lumpy sales. It has a further $1.25 million share purchase plan in the works, and that is likely to open on Sept. 6.

"They obviously did that easily and the market liked it," Easton said. "They've got a very clever product suite. They still do some very specialised stuff, particularly for utility companies, and they're dominating the market in the States. That capital raising is a vote of confidence in the technology and the company."

Metro Performance Glass dropped 6 percent to 79 cents. The company downgraded its guidance at its annual shareholders' meeting this morning due to weakness at its Australian division. Metro Glass expects group earnings before interest and tax in the 2019 financial year to be at the lower end of its target range of $30 million to $33 million.

Delegat Group rose 0.1 percent to $10. New Zealand’s largest listed winemaker lifted annual profit 15 percent to $46.8 million, boosted by a revaluation of its biological assets.It also confirmed its growth outlook for the next three years.

(BusinessDesk)

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