MARKET CLOSE: NZ shares rise on Tegel's Australian access, Trade Me, Spark results

Thursday 18th August 2016

New Zealand shares rose after Tegel Group said it had been cleared to export raw poultry to Australia, Trade Me Group reported stronger annual revenue and investors cheered Spark New Zealand's promise of further special dividends in 2017.

The S&P/NZX 50 Index gained 30.10 points, or 0.4 percent, to 7,385.12. Within the index, 27 stocks rose, 22 fell and two were unchanged. Turnover was $169 million.

Tegel rose 5.5 percent to a record $1.73 after New Zealand's largest poultry company said it had worked alongside the Ministry for Primary Industries to secure improved access to the Australian market, where it had previously only been permitted to export fully cooked chicken. The Australian poultry market is estimated to be worth A$7.1 billion.

"It's certainly a positive opportunity, said Rickey Ward, NZ equity manager at JBWere. "Whether it turns into any material earnings upgrade it's far too early to predict. It's a much bigger market."

Trade Me rose 5.1 percent to $5.40. The auction website reported a 9.2 percent gain in full-year revenue to $218 million, although net profit fell 6.5 percent to $74.9 million including an impairment charge against its online dating business FindSomeone and its share of losses from lending platform Harmoney.

Spark gained 2.9 percent to $3.865 after the telecommunications retailer confirmed a final dividend of 11 cents per share and a special dividend of 1.5 cents, taking the total payment to 25 cents in the year. Chairman Mark Verbiest said the company plans to repeat that return of 22 cents in ordinary dividends and a 3 cent special dividend in 2017. Profit fell 1.3 percent as the company paid more tax and had weaker revenue.

The results "show how good management is at controlling costs," Ward said. "In this environment, sustainability of dividends is always going to be an issue." The results also showed Spark has gained mobile market share, he said.

Port of Tauranga rose 0.1 percent to $19.34 after the nation's busiest port company announced plans to return $140 million to shareholders over four years, starting with a special dividend of 25 cents, fully imputed, in addition to a final ordinary dividend of 30 cents a share. The port company also plans a five-for-one share split to boost liquidity. Full-year profit fell 2.3 percent.

Fisher & Paykel Healthcare fell 3.2 percent to $10.15 after rival Resmed filed a patent infringement complaint in the Southern District of California, as well as lawsuits in Germany and New Zealand, and to the US International Trade Commission against Fisher & Paykel Healthcare. The action comes just days after the Auckland-based company filed its own lawsuit against its US rival in the market for breathing masks and air flow products.

TrustPower fell 1.7 percent to $8 after an independent adviser’s report into its plans to carve out its windfarms and renewable development pipeline into Tilt Renewables said it will give the new entity freedom to chase opportunities which should outweigh the cost of the transaction.

Precinct Properties New Zealand rose 0.8 percent to $1.285 after the listed commercial property investor increased annual profit 13 percent and lifted its guidance as it shifted its weighting to Auckland, where it sees long-term growth.

Fletcher Building rose 2.2 percent to $10.38, adding to a 4.9 percent gain yesterday when the building and construction company posted a 71 percent gain in full-year profit and met its earnings guidance, driven by an improved performance in Australia and gains in its New Zealand distribution, residential and construction divisions.

Skellerup Holdings rose 4.3 percent to $1.46 after the company posted a 6 percent decline in annual profit as weaker demand for products in its agricultural business weighed on improved earnings from its industrial unit. Profit fell to $20.5 million, in line with the company's guidance, and chairman Selwyn Cushing said earnings are expected to improve in the 2017 financial year.

BusinessDesk.co.nz

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