MARKET CLOSE: NZ shares down, Metro Glass at record low while A2, Comvita gain

Friday 25th August 2017

New Zealand shares fell, with Metro Performance Glass dropping to a record low while A2 Milk Co and Comvita rose on continued optimism following their earnings.

The S&P/NZX50 Index fell 10.6 points, or 0.1 percent, to 7,857.81. Within the index, 28 stocks dropped, 14 rose and eight were unchanged. Turnover was $167 million.

"We've got a pretty stagnant market today, no real leads from offshore," said Grant Williamson, investment advisor at Hamilton Hindin Greene. "The market is obviously digesting a number of reports from various companies."

Metro Glass led the index lower for the second day in a row, falling 8.9 percent to a record low $1.13. Yesterday the company said it expects its first half results to be largely flat despite the contribution from recently acquired Australian Glass Group.

"That's still got some downside, the market doesn't like what the directors were saying at the AGM and it's at a record low. It's certainly struggling and a number of investors are losing faith," Williamson said.

Ryman Healthcare fell 1.7 percent to $9.25 and Vista Group International declined 1.5 percent to $5.42.

A2 Milk Co gained 4.9 percent to $5.74, a fresh record. On Wednesday the milk marketer announced it had tripled its annual profit to $90.6 million and would use some of its accumulated cash to buy back shares, and may pay a special dividend.

"You can't keep a good thing down - some analysts are putting higher target prices on the stock, and it's continuing to create demand," Williamson said. "A lot of that is coming out of Australia. It is very much a straight line up for that stock at the moment, the share price has more than doubled this year and it's been a real winner for investors."

Comvita gained 4.4 percent to $7.20. It began gaining on Tuesday after beating full year guidance and announcing it expects to return to an operating profit in the current financial year.

"Confidence has returned following their result and positive outlook, that share price had been savaged and it lost a lot of ground in a very short time," Williamson said. "It had an extremely poor honey season so it was really all over the show this year, so today's a recovery from the lows we saw in July."

Port of Tauranga rose 2.2 percent to $4.56. New Zealand's biggest port company today posted a 7.9 percent gain in annual profit to $83.4 million, at the top of its guidance, in a year when total trade rose 10 percent to a record 22.2 million tonnes. Profit was just below the estimate of $84.1 million from brokerage Forsyth Barr, which has an 'underperform' rating on the stock.

It will pay a special dividend of 5 cents a share, the second payment under a plan to return up to $140 million to shareholders over four years and says it expects further growth in volumes and earnings this year. Over the past six years, it has hoovered up 55 percent of the nation's international cargo volume growth, more than four times its nearest rival.

Outside the benchmark index, Evolve Education dropped 2.7 percent to 73 cents. Chief executive Alan Wham has resigned and will leave in September. The early childhood education centre operator last week warned annual profit will fall as much as 12 percent in the current year due to lower occupancy rates than a year earlier. The stock has plunged 27 percent since the profit warning.

Fliway Group fell 3.5 percent to $1.11. Its annual profit came in at the top end of guidance, sliding 31 percent to $3.9 million, as an operational restructure in response to a major customer loss and mounting freight costs from last year's Kaikoura earthquake staunched the decline.

Revenue edged up 3.4 percent to $85.4 million as the company attracted new customers in the second half. The result pipped Fliway's own guidance for profit to be between $3.5 million and $3.9 million, and was ahead of Forsyth Barr analyst Andy Bowley's forecast for $3.7 million on revenue of $83.9 million.

Wellington Drive Technologies declined 2.3 percent to 21 cents. It edged closer to a long-awaited profitability as first half sales climbed and margins improved, although the board sounded a warning over cash constraints coming when there could be opportunities to grow.

The Auckland-based company narrowed its loss to $522,000 in the six months ended June 30 from $1.2 million a year earlier, and generated its first surplus on an earnings before interest and tax basis of $181,000. Revenue climbed to $23.8 million from $18.7 million, while gross margin widened to 24.9 percent from 22.4 percent.

NPT was unchanged at 59.5 cents. The newly installed board confirmed plans to keep the property investor's dividend unchanged at 3.6 cents this financial year as it works through changes at the company. NPT posted a 63 percent drop in annual profit to $3.1 million for the 12 months to March after some of its properties reduced in value and it faced extra costs from a proposed deal with Kiwi Property Group that didn't proceed.

Seeka was flat at $5.11. The kiwifruit grower lifted first-half profit 56 percent to $11.1 million as it enjoyed wider margins across the Tasman, but it still expects a smaller crop will see a decline in annual earnings. It anticipates a smaller New Zealand kiwifruit crop this year, with volumes down 21 percent in the first half, and affirmed annual guidance for a 15 percent drop in operating profit to $6.6 million in calendar 2017.

(BusinessDesk)

Comments from our readers

No comments yet