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MARKET CLOSE: NZ stocks down, Orion falls while Mainfreight gains on record profit

Tuesday 30th May 2017

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New Zealand shares were virtually unchanged today in weak trading, with Orion Health Group dropping on capital raising news while Mainfreight gained after posting a record annual profit.

The S&P/NZX50 Index dropped 0.79 points, or 0.01 percent, to 7,411.95. Within the index, 21 stocks fell, 19 rose and ten were unchanged. Turnover was $114.6 million.

"There's no catalyst really to drive activity, the market's just going through the motions a bit at the moment, just consolidating," said Grant Williamson, director at Hamilton Hindin Greene. 

Outside the benchmark index, Orion Health Group dropped 13.3 percent to $1.04. It will raise $32.9 million in a discounted two-for-nine rights issue to shore up working capital after posting a $34.2 million full-year loss that reflected weaker sales in Europe, the Middle East and Africa.

"It's not surprising that they're looking to raise further funds as well, they've had another reasonable size loss," Williamson said. "The share price did rally yesterday ahead of the announcement, probably bargain hunters after some pretty sizeable falls, but today's results and the capital raising news pushed it back down. I'm sure investors will be hoping this cash injection will carry them through to a profit."

Comvita was the best performer, up 1.8 percent to $5.65.

"Bargain hunters are pushing it back up, but it's still down significantly on a month or so ago," Williamson said. "There are a few concerns abound myrtle rust and a very poor honey season. The share price did have a fantastic rally over a relatively short period of time, at some stage it was always going to come down. It's pretty much halved in value over the past year."

Mainfreight rose 1 percent to $22.50. The transport and logistics group posted a 16 percent gain in full-year profit to $101.5 million, surpassing $100 million for the first time, led by earnings growth in New Zealand and Australia.

A2 Milk Co gained 1.5 percent to $3.37, while Westpac Banking Corp gained 1 percent to $31.82.

Restaurant Brands was the worst performer, down 2.3 percent to $5.61, and Z Energy dropped 1.6 percent to $7.52. 

Summerset Group dipped 1 percent to $4.88. The retirement village operator announced a retail bond offer of $75 million with the ability to accept up to $25 million in over-subscriptions, its first domestic regulated bond issue and the first for the New Zealand retirement village sector. 

Outside the main board, Moa Group fell 4.6 percent to 63 cents. The Marlborough-based brewer reported a slightly narrower full year net loss of $2.4 million as revenue lifted 26 percent and gross margin improved.

IkeGPS declined 2.6 percent to 37 cents. The laser measurement toolmaker widened its annual loss to $10.7 million after a "difficult first half", but expects growth and cash breakeven in 2018.

ERoad dropped 1.7 percent to $1.72. The Auckland-based company reported a wider net loss of $5.3 million in the 2017 financial year driven by US investment and changes to the way it amortises development costs, although the result was slightly ahead of its forecast.

Augusta Capital was unchanged at $1.01. It posted a 42 percent drop in annual profit to $7.8 million after a reduction in its directly held property portfolio led to it having a smaller increase in the value of its investment properties.

SeaDragon, which manufactures fish oil for health supplements, gained 20 percent to 0.6 of a cent. It reported a wider annual loss in the year to March 31, largely due to the time it has taken to transition the business from its legacy Omega-2 business to Omega-3 fish oils refined in the new refinery. The company said its net loss was $6.7 million versus $5.5 million in the prior year. It's normalized ebitda loss of $4.4 million was in line with guidance late last week. 

Energy Mad was unchanged at 0.5 of a cent. It reported a loss of $4 million in the year to March 31, versus a loss of $1.3 million in the prior year as revenues tumbled. Earlier this month the energy efficient light bulb maker and marketer, has entered an agreement relating to the sale and purchase of its assets with a proposed settlement date of Nov. 17.


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