Wednesday 28th February 2018
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New Zealand shares were mixed, with Sky Network Television sinking to a ten-week low while Synlait Milk and Trade Me Group gained.
The S&P/NZX 50 Index gained 13.44 points, or 0.2 percent, to 8,373.82. Within the index, 24 stocks fell, 17 rose and nine were unchanged. Turnover was $190 million.
Sky Network Television sank 9.6 percent to $2.53, making it the worst performer today. It has slashed prices in an effort to slow an exodus of customers quitting its pay-TV service in favour of cheaper on-demand rivals and cut its interim dividend in half to 7.5 cents in an effort to cope with the rapidly changing environment. First-half profit rose 12 percent to $66.6 million.
"The result itself was ahead of market expectations, chiefly on very good cost control, however, the changes to the programming setup and subscriber losses appear to have spooked the market a little," said Matt Goodson, managing director at Salt Funds Management. "Though the trends were reasonably obvious, it had held up pretty well in the $2.80s, but the risks around the sustainability of programming packages crystallised in these results."
NZX dropped 1.9 percent to $1.05 and Z Energy fell 1.8 percent to $7.
Fletcher Building declined 1.8 percent to $6.51. Its chief transformation officer Lee Finney has resigned, two years after being appointed in what was then a new position by former chief executive Mark Adamson.
"Fletcher has a new CEO who is well-regarded from what he's achieved in his background, so he'd be looking to put his own people in," Goodson said.
Synlait Milk led the index higher, jumping 9.7 percent to $7.84. Goodson said the share price movements were hard to understand, particularly given changes announced last week by A2 Milk which sees A2 forge a close supply relationship with Fonterra, which market watchers have seen as limiting Synlait's future growth with A2.
Air New Zealand gained 3.8 percent to $3.29
Trade Me Group rose 2.3 percent to $4.40. The company, which operates New Zealand's largest online auction site, said earnings didn't budge in the first half as its expenses grew faster than revenue. It expects full-year profit to grow at a slower pace than last year.
CBL Corp, suspended from trading at $3.17, announced it won't release its accounts for the year ended Dec. 31. The company went into voluntary administration on Friday after the Reserve Bank of New Zealand's successful High Court application to appoint interim liquidators to CBL Insurance to maintain the assets of the Kiwi insurer.
Outside the benchmark index, Tower rose 1.5 percent to 68 cents. It has reached a settlement with reinsurer Peak Re over a dispute relating to its 2015 adverse conditions cover and will get about half what it has claimed.
Auckland-based Tower will receive $22 million of the $43.8 million claimed under the reinsurance contract and all sums claimed in arbitration proceedings. Writing off the residual amount will reduce annual profit by about $15.2 million.
"That really de-risks the balance sheet, it's one more risk removed from that company," Goodson said.
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