MARKET CLOSE: NZ shares rise after Meridian, Fletcher earnings

Wednesday 19th August 2015

New Zealand shares rose as Meridian Energy, Fletcher Building and Precinct Properties New Zealand advanced on positive financial results.

The S&P/NZX 50 Index rose 39.25 points, 0.7 percent, to 5750.02. Within the index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $140 million.

Meridian gained 2.7 percent to $2.25. The country's biggest electricity generator lifted annual earnings 5.6 percent to $585 million, beating its prospectus forecast, and plans to pay a second special dividend after asset sales helped boost the company's cashflow. The company is embarking on a five-year capital management programme in which it intends, barring unforeseen investment opportunities or market changes, to return $625 million to shareholders, chief executive Mark Binns said.

"It was a good result from them ahead of the prospectus forecast and a special dividend now," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It's more good news and it's been a great performer since listing and has been rewarded today for a good result."

Fletcher rose 2.8 percent to $5.65. The building and construction firm posted a 20 percent decline in full-year profit to $270 million after taking $150 million of one-time charges for plant closures and impairments, while sales climbed 3 percent to $8.66 billion. Pretax earnings rose in line with guidance, driven by a strong New Zealand performance.

"A pretty solid result," Lister said. "New Zealand again is the standout as the far as the different businesses are going, with Australia still probably not as strong as they would like."

Precinct rose 0.9 percent to $1.155. The property investor posted a 4.4 percent increase in net profit to $122.4 million for the year ended June 30.

Sky Network Television led the benchmark index higher, up 2.9 percent to $5.65.

NZX was unchanged at $1.06. The stock market operator reported a 12 percent decline fell in first-half earnings to $6.2 million as costs outpaced sales growth, fewer companies listed and agri publications suffered in a tighter rural sector. The sale of Link Market Services boosted net profit.

SkyCity Entertainment Group fell 0.2 percent to $4.10. New Zealand's only listed casino company may sell as much as $125 million of bonds to repay bank debt.

Xero was the worst performer on the benchmark index, dropping 3.5 percent to $15.24, it's lowest level since December.

Spark New Zealand, formerly Telecom Corp, rose 2.8 percent to $2.785.

Outside the benchmark, Serko surged 21 percent to 91 cents, after the travel booking software firm announced a deal with US-based hotel-finding website Expedia. Separately the company downgraded its revenue outlook for a second time due to a slowing Australian economy weighs and delays in a number of contracts. It now expects revenue of between $6.3 million and $7 million in the six months ending Sept. 30, down from its $8 million forecast in May, which was the first downgrade from the $8.3 million flagged in its prospectus.

Colonial Motor Co was unchanged at $5.97 after reporting a 7.4 percent decline in annual profit to $25.3 million on skinnier margins at its car dealerships and reduced demand for tractors on weaker dairy prices.

BusinessDesk.co.nz

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