MARKET CLOSE: NZ shares rise; Infratil, Heartland gain on earnings growth

Wednesday 18th May 2016

New Zealand shares rose, pushing the S&P/NZX 50 Index to a new record after Infratil posted a gain in full-year earnings and said it has a $1 billion war chest to make acquisitions. Heartland New Zealand advanced after reporting a gain in profit while Steel & Tube dropped after cutting its guidance.

The NZX 50 rose 7.77 points, or 0.1 percent, to 6982.64. Within the index, 24 stocks gained, 20 fell and six were unchanged. Turnover was $185 million.

Infratil rose 2 percent to $3.375 after the Wellington-based investor said it has almost $730 million in cash and unused credit lines of about $270 million and it was looking at potential acquisitions.

“Of course, as time goes if investments are not made then excess capital will be returned to shareholders,” chief executive MrkoBogoievski and chairman Mark Tume said in its annual report.

Heartland gained 0.9 percent to $1.18 after posting a 10 percent gain in nine-month profit while delaying a planned return to shareholders, saying market volatility had created opportunities for acquisitions which may be a better use of its capital. It affirmed guidance for profit of $51 million to $55 million for the year ending June 30, up from $36 million in 2015.

"The Heartland result was a little better than we expected," said Mark Lister, private wealth manager at Craigs Investment Partners. The lender's update "tells us they are on track" to deliver forecast annual profit and the delay to capital expenditure suggests "presumably they have found something to invest in."

Heartland has been mooted as a potential buyer for ANZ Bank New Zealand’s UDC Finance business.

Pushpay Holdings fell 3.1 percent to $2.20 after the mobile payment app company posted a wider annual loss as it chased sales growth ahead of profit, reiterating its forecast to break even in 2017.

Intueri Education Group rose 8.1 percent to 40 cents after listed training provider. the company told shareholders at their annual meeting today that underlying earnings, before, interest, tax, depreciation and amortisation for the 2016 financial year will be slightly less than the $21.5 million achieved in 2015.

Steel & Tube Holdings fell 4.4 percent to $2.15 after the listed steel products distributor cut its full-year guidance, saying underlying earnings may fall 10 percent to 15 percent as margins contracted and it incurred costs related to quality issues for the mesh.

"Some competitors appear to be pricing aggressively to win market share in the local market," Lister said.

Auckland International Airport rose 2.2 percent to $6.65, leading the index higher, Orion Health Group gained 1.7 percent to $4.84 and Fisher & Paykel Healthcare rose 1.1 percent to $10.08.

Trustpower rose 2 percent to $8, the biggest gain among energy companies that would be affected by proposed changes to national grid charging policy. Contact Energy rose 0.4 percent to $5.37. Vector fell 0.6 percent to $3.40, Mighty River Power fell 0.3 percent to $3 and Meridian Energy declined 1.1 percent to $2.79.

Trilogy international climbed about 4 percent to $3.95. The skincare and home fragrance company said it continues to comply with its market obligations after being asked by the NZX to explain a 50 cent rise in its share price in four days of trading.

BusinessDesk.co.nz

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