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Fletcher and Spark earnings settle investors

New Zealand shares rose as first-half earnings reports from Fletcher Building and Spark New Zealand brought confidence to investors.

Wednesday, February 19th 2020, 6:22PM

by BusinessDesk

The S&P/NZX 50 Index increased 45.19 points, or 0.4 percent, to 11,981.03. Within the index, 19 stocks gained, 28 fell, and three were unchanged. Turnover was $133.4 million.

Fletcher led the market higher, rising 4.4 percent to $5.41 on a bigger volume than usual of 4.2 million shares. It reported a first-half profit of $82 million, down from $89 million a year earlier, due largely to costs from its Australian restructuring. It lifted its interim dividend to 11 cents per share form 8 cents.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the result offered some certainty to investors after heavy selling last week.

“Fletcher had been sold off quite a bit in the lead up to the result. So, an increase in certainty of direction has helped some investors be more comfortable with where the company is at,” he said.

Spark New Zealand rose 0.6 percent to $4.78 on a volume of almost 2 million shares, after reporting a 9.2 percent lift in first-half profit. The telecommunications company made inroads into the increasingly valuable mobile market and continued to benefit from a cost-cutting drive.

Davies said Spark's was slightly ahead of expectations, which caused the modest rise, but was not such a surprise. He pointed to the stock's steady gain of 17.9 percent over the past 12 months.

“Spark’s consistent results over time are being rewarded by the market. The stock - while not at all-time highs – is tracking along quite nicely,” he said. 

Overnight, dairy prices fell for the second straight time at the latest Global Dairy Trade auction amid concern about the spreading coronavirus covid-19. Economists warned that could lead lower forecasts for Fonterra Cooperative Group's farmgate payout.

Dairy stocks had a mixed reaction. Fonterra Shareholders Fund eased 0.3 percent to $3.94, while A2 Milk rose 0.9 percent to $16.43 and Synlait Milk advanced 3.3 percent to $6.77.

Davies said falling dairy prices were not always a negative for dairy stocks because the milk price was a cost of production.

The fallout from the covid-19 outbreak continued to weigh on the local market. Air New Zealand yesterday said it would cut the number of flights to Shanghai as customer demand has weakened due to the outbreak. The airline's shares fell 2.5 percent to $2.71 on a volume of 1.4 million shares and Auckland International Airport decreased 0.8 percent to $8.35.

Ryman Healthcare fell 2.6 percent to $2.71, posting the biggest decline on the day.

Fisher & Paykel Healthcare continued to hit new records, rising 2 percent to $25.11 and Heartland Group Holdings crept up 0.5 percent to $1.90 – up 2 percent since reporting its first-half result yesterday. 

Among other stocks trading on volumes of more than a million shares, Metlifecare fell 0.1 percent to $6.92, Meridian Energy rose 1.1 percent to $5.68, Kiwi Property Group declined 0.3 percent to $1.555 and Contact Energy gained 0.5 percent to $7.66.

Tags: Market Close

« Heartland highlight in NZ shares reporting seasonNZX50 cracks 12,000 first time ever; Ebos, Auckland Airport earnings lift market »

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  • a2: could the milk be starting to turn?
    “Great Fundemental look.I guess in the ASX50 . as long as Aussies still love buying the Dip..its no worries Graeme Adams...”
    18 hours ago by Graeme33
  • It starts with governance
    “Hi David and thanks for your words also. I did read the FMA stuff before the post and also in my first response mention...”
    20 hours ago by gavin austin adviser business compliance
  • AMP reports profit drop amid 'solid' result
    “Sadly, AMP is becoming less and less relevant. Apart from this tiny blip of positive cash inflow, they've been bleeding clients...”
    21 hours ago by Contrarian
  • It starts with governance
    “Good words Gavin - might also mention the FMA publication - https://www.fma.govt.nz/compliance/guidance-library/corporate-governance-in-new-zealand-principles-and-guidelines/...”
    21 hours ago by dcwhyte
  • It starts with governance
    “adviser1 - go talk to Partners Life. they have a great tool to help with this sort of stuff. ...”
    23 hours ago by Tash
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Last updated: 14 August 2020 1:06pm

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