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MARKET CLOSE: NZ shares gain on Metlifecare result; Summerset rises, Ryman, Fletcher fall

Monday 27th February 2017

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New Zealand shares rose after Metlifecare posted a 31 percent jump in first-half profit and said people were queuing up to enter its retirement villages. Summerset Group also rose while Ryman Healthcare and Fletcher Building fell.

The S&P/NZX50 Index gained 20.61 points, or 0.3 percent, to 7,079.19. Within the index, 21 stocks gained, 20 fell and nine were unchanged. Turnover was $95.6 million.

Metlifecare rose 4.5 percent to $5.85 after reporting stronger first-half profit that was aided by a gain in the value of its property, while chief executive Glen Sowry cited strong demand for its units and an occupancy rate that has edged up to 97 percent. Summerset, which last week posted a 50 percent gain in annual earnings after opening more villages and fattening its margins, gained 1.8 percent to $5.17. Ryman, the largest of the four listed retirement village operators but with a March 31 balance date, fell 2.3 percent to $8.60.

"Metlife was a good result - the market liked what it saw," said Grant Williamson, a director at Hamilton Hindin Greene. "Similar to Summerset it has come out and showed there's a lot of growth left in the retirement sector". Ryman may have fallen as some investors switch out of the stock into its two rivals on perceptions that it may be "a little bit overpriced on fundamentals", he said.

Metro Performance Glass advanced 5.9 percent to $1.44, having fallen last week on concern about demand in the construction industry. Fletcher dropped 1.3 percent to $9.57.

Fletcher's decline shows "a continuation of the selling following their slightly disappointing result last week," Williamson said. Fletcher stock had become "a little bit pricey" and analyst reports in the wake of the result have been neutral in tone.

"There's still some good profits to be had in that stock after its gains of last year," he said. "So often we see their results come out and they don't live up to expectations."

CBL Corp dropped 8.8 percent to $3.01, adding to the 11 percent decline on Friday, when the credit surety and financial risk insurance company posted full-year earnings that missed some market expectations and included one-time costs that weren't projected in its prospectus. While its operating earnings exceeded its forecast, analysts at UBS have cut their price target on the stock to $.65.

"Maybe one or two large investors think it's had a good run and it's time to exit," Willamson said.

Spark New Zealand fell 1.5 percent to $3.51, even after announcing an exclusive deal with Netflix to offer bundled packages of broadband and programming. The deal comes just days after the Commerce Commission rejected Sky Network Television's proposed merger with Vodafone New Zealand on the basis it would stifle competition, especially in access to premium sports content.

Sky TV gained 0.3 percent to $3.78, having tumbled to its lowest level since mid-2009 last week, following the regulator's ruling. Chorus, the telecommunications network operator, rose 1.8 percent to $4.01.

Vital Healthcare Property Trust was unchanged at $2.075 after announcing a continuation of its acquisition spree since last year's capital raising, with the purchase of hospitals in Perth and Auckland. The healthcare property developer and investor today announced the purchases of a 30-bed private mental health hospital in Perth for A$20 million and a 31-bed private surgical hospital in Auckland for $33 million. 

Trade Me Group, the auction website, rose 4.1 percent to $5.12, Mercury NZ gained 2.6 percent to $3.13 and Auckland International Airport rose 3.6 percent to $7.20. 

New Zealand Refining, which reports its full-year results tomorrow, gained 1.5 percent to $2.78.

Delegat Group, New Zealand’s largest listed winemaker, rose 0.8 percent to $6.20 after announcing a 17 percent gain in first-half operating profit and predicting annual profit to be in line with last year.

Airwork Holdings, the Auckland-based aircraft services business, was unchanged at $5. Today it said profit rose 9.5 percent in the first half as it awaits the outcome of a partial takeover offer from Chinese group Zhejiang Rifa Holding Group.

Marsden Maritime, which owns half of the Marsden Point-based Northport along with a marina, commercial facilities and land, gained 1.3 percent to $3.95. The company today said it lifted first-half profit 21 percent on increased cargo volumes going through the port. 

Mercer Group, the stainless steel fabricator, was unchanged at 38 cents after posting a $2.6 million loss in the first half while saying it's anticipating a return to positive pre-tax earnings for the second half despite the "disappointing" start.

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