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MARKET CLOSE: NZ stocks mixed in results season, Orion Health down while Comvita gains

Monday 23rd May 2016

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New Zealand shares were mixed on a relatively quiet Monday as the market digested results posted by companies with a March 31 balance date. Orion Health Group dropped while Comvita and Sky Network Television gained.

The S&P/NZX50 Index dropped 2.09 points, or 0.03 percent, to 6,907.77. Within the index, 21 stocks rose, 18 fell and eleven were unchanged. Turnover was $109 million.

"During reporting season, our market tends to go into a bit of a lull volume-wise as people work their way through results and then re-assess afterwards," said Rickey Ward, New Zealand equity manager at JBWere.

Orion Health dropped 2.2 percent to $4.56. The Auckland-based company posted a loss of $54.4 million in the 12 months ended March 31, from a loss of $60.8 million a year earlier. The health software developer said it's targeting a return to profit in 2018 after reporting a 26 percent increase in annual revenue as a weaker New Zealand dollar bolstered returns and a smaller tax expense helped narrow its loss.

"It rallied into the result, and you've got a market which is in many respects priced for perfection," Ward said. "If you don't deliver results better than that, you're probably struggling to justify the multiple you're on. Share price movements are not always a reflection of the underlying business case, it's only natural for people to take profits when they see the actual numbers."

Air New Zealand was the worst performer on the index, down 2.8 percent to $2.21.

Fletcher Building fell 1.9 percent to $8.44, Xero shed 1.8 percent to $16.70, and Coats Group declined 1.6 percent to 62 cents.

Summerset Group dropped 0.2 percent to $4.67. The Wellington-based company plans to build a second retirement village in Nelson after buying an 8-hectare site in Richmond, adding to its existing village in neighbouring Stoke. Summerset estimates Nelson's over-75 population will more than double by 2033. No price was disclosed for the purchase.

Comvita gained 4.3 percent to $12.85, an all-time high, and has risen 46.7 percent this year. 

"It went into an index not that long ago, liquidity's pretty thin on that stock and they had a pretty good result, so there's a liquidity squeeze on that," Ward said. "It's really one of those difficult stocks to get into."

Mainfreight rose 1.8 percent to $16.39 while Vector advanced 1.8 percent to $3.42. 

Sky TV gained 1.4 percent to $4.27. 

"It's certainly well off its lows, it seems to have found a little bit of support," Ward said. "The price paid for content doesn't seem to be going down and you've got subscribers who are finding ways to reduce their cost. It naturally raises the question, are they an old-world company operating in a new-world environment, and that's up for debate."

Outside the main index, Abano Healthcare Group gained 1.3 percent to $7.75. The listed medical and dental centre investor has agreed to sell its 50 percent stake in audiology company Bay International to interests associated with Peter Hutson for $32 million and said earnings would be at the top end of guidance.

NPT advanced 1.5 percent to 69 cents. The listed property investor, whose managing director Kerry Hitchcock left suddenly in March, reported a 1 percent gain in full-year distributable profit and said it will lift its dividends for 2017, a year in which it is focused on keeping a lid on corporate and management expenses.

Sanford was unchanged at $5.65. The country's largest listed fishing group will book a $5 million impairment charge on the sale of its last Pacific Tuna vessel when it reports half-year earnings on Thursday. The Auckland-based company settled the sale of the San Nikunau having put that Pacific Tuna fleet up for sale when it decided to quit the business in September last year, Sanford said in a statement. Weak tuna prices led to "very limited interest" in those type of vessels, it said.

Evolve Education Group shed 3.9 percent to $1. The childcare operator turned to a profit in its latest year, although earnings undershot the target in its 2014 prospectus because of acquisition-related costs. Profit was $15.6 million in the 12 months ended March 31, from a loss of $8.1 million a year earlier, the Auckland-based company said in a statement.

Blis Technologies dropped 2.9 percent to 3.3 cents. The biotech company expects to report its first annual profit in 2017, the first since listing 15 years ago after sales more than doubled in 2016. The Dunedin-based company reported a net loss of $816,000, or 0.07 cents per share, in the 12 months ended March 31, from a loss of $1.4 million, or 0.12 cents, a year earlier, it said in a statement.

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