Friday 24th February 2017
|Text too small?|
By Sophie Boot
Feb. 24 (BusinessDesk) - New Zealand shares fell, with Warehouse Group and Mercury New Zealand ending down, while Air New Zealand rose.
The S&P/NZX50 Index dropped 30.93 points, or 0.4 percent, to 7,058.59. Within the index, 23 stocks fell, 14 were unchanged and 13 rose. Turnover was $127.5 million.
Warehouse Group led the index lower, down 2.6 percent to $2.59. Yesterday, the retailer said it expects to shed a net 130 jobs, or about 1.1 percent of its workforce, in an effort to save up to $20 million a year after slimming down the structure of its retail model to try to strip out duplication.
"It hasn't reported this earnings season but obviously had the news about head office restructuring - while there's a bit of cost saving there, I think people are generally seeing a mixed environment out there for retail," said Mark Lister, head of private wealth research at Craigs Investment Partners.
Mercury New Zealand dropped 2.6 percent to $3.05, while Trade Me Group fell 2.4 percent to $4.92.
Metro Performance Glass fell 2.2 percent to $1.36, while Fletcher Building fell 1 percent to $9.70. Fletcher dropped 5.2 percent on Wednesday after posting a 2 percent gain in first-half profit that included unexpectedly weak earnings from its construction division, especially given its $2.7 billion backlog of work.
"It's (Metro Performance Glass) looking a bit underwhelming, it's had a rough few months - it was trading as high as $2.20 back in September/October, and it's fallen by close to $1," Lister said. "Maybe the Fletcher result being a bit disappointing is having an impact, there are obviously similar economic drivers for those two stocks."
Vector dipped 0.3 percent to $3.24. The Auckland-based electricity and gas distributor posted a 7 percent gain in first-half profit to $107 million, driven by stronger sales, lower finance costs and a one-time gain after a Court of Appeal ruling on a tax claim. Sales rose to $626 million from $591 million.
"It looked pretty good in the scheme of things, it was near the top of expectations; a solid result, as you'd expect from a reliable company like Vector," Lister said.
Vista Group International was unchanged at $5.40. The cinema analytics software developer will pay a bigger maiden dividend than analysts were picking after profit was bolstered by a gain on its Chinese joint venture and as underlying earnings increased 17 percent.
Air New Zealand was the best performer, up 1.3 percent to $2.28, while Spark New Zealand gained 1 percent to $3.565 and Skycity Entertainment Group rose 1 percent to $4.09.
Outside the benchmark index, CBL Corp dropped 11 percent to $3.30. Full-year profit was $30.7 million, falling short of the $40.4 million forecast in its prospectus, reflecting one-time costs including a foreign exchange adjustment, while operating earnings of $76.2 million exceeded its prospectus forecast of $63.6 million.
"There were a few one-offs by the look at it, what they're saying is the result's not as bad as it maybe looks at first glance because they're more focused on the underlying profit," Lister said. "Insurance companies can be a bit confusing to watch.
"It has been a very good performer since it listed in 2015, if you look at this time last year it wasn't too far above $2 and it put on a pretty stellar performance through most of last year so it's possibly a case of expectations being a little high, and maybe the market wasn't as happy with the numbers as the company was. It looks like the reinvestment to support growth is being viewed as a negative by some corners, but I wouldn't think there's anything to be concerned about from CBL," he said.
No comments yet
AIA June 2020 Monthly Traffic Update and July 2020 Preview
PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update