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NZ sharemarket rises, aided by speculation of Fletcher sale

The New Zealand sharemarket had its second positive day on the trot on Thursday as shares were buoyed by favourable corporate earnings and speculation about a Fletcher buyout à la française.

Thursday, February 22nd 2024, 6:17PM

by BusinessDesk

The S&P/NZX 50 Index closed at 11,690.25, up 99.83 points or 0.86%. There were 84 gainers and 55 decliners over the whole market on volumes of 27 million share transactions worth $99.4 million.

Speaking to BusinessDesk Thursday afternoon, Hobson Wealth director Brad Gordon said there was improved sentiment coming back into the market.

"We’re a hugely interest rate sensitive market. We have had a big sell-off in rates this month, which seems to have stabilised a wee bit so that's obviously going to bring a bit of a pullback into equities,” he said.

The top gainer of the day was Comvita, which added 25.7%, bringing its share price to $2.25, after news the firm was approached by a “credible offshore party” to acquire all of its shares at a "significant premium".

Fletcher bounces back

After the tumult of last week Fletcher Building was up an impressive 9.7% to $3.84. The shares were traded to the value of $12m today, comprising 13% of all trades. The hike came off the back of a report from the Australian newspaper that raised the possibility of NZ's largest construction company being bought – partially, or fully – by French conglomerate Saint-Gobain. 

“Multiple well-placed sources said on Wednesday that at least one inbound offer – thought to be from private equity – had been made for the Australian business of Fletcher Building, while another source said there had been a proposal to buy the company as a whole,” the report read.

But don’t get your hopes up just yet Francophiles –

Fletcher Building told the Australian it had not received any approaches.

Earnings season

SkyCity was unchanged at $1.87 after it reported a net profit of $22.5m, down 1.3% on the year.

Earnings before interest, tax, depreciation, and amortisation (ebitda) slipped 5% to $101m on generally tighter consumer spending.

It was a “solid operating result”, said Jarden analysts Adrian Allbon and Nick Yeo.

They noted that gaming machine revenue was weaker due to economic conditions but still above pre-covid levels.

Sky rose 1.5% to $2.80 after the satellite TV, streaming and broadband provider's advertising revenue increased by 12% year on year in the six months to Dec 31, which contributed to 3.7% overall revenue growth and a 10.5% rise in net post-tax profit to $29m.

Air NZ declined 0.8% to $0.61. The national carrier announced earnings before taxation of $185m for the first half of the 2024 financial year, down 38% on the same period last year.

Auckland Airport, meanwhile, added 1.24% to $8.15 after it reported a strong lift in earnings for the half year to Dec 31, reflecting the ongoing bounceback in post-pandemic global travel combined with new, higher landing charges and strong performance in unregulated parts of its business.

Craigs Investment Partners research analyst Wade Gardiner said the overall result was slightly ahead of what he expected but with a far better retail performance and weaker-than-expected investment property revenue.

He was also upbeat about the fact guidance for the full year underlying net profit of $260m to $280m was left unchanged.

On the property front, Precinct Properties added 1.7% to $1.22 after reporting a net profit attributable to equity holders of $15.3m, a sharp turnaround from a loss of $1.8m in the same period a year earlier.

The move was largely due to a net change in the fair value of property.

Among energy companies, Genesis rose 0.4% to $2.54 as the company recorded large drops in earnings and profit as it dealt with a major plant outage, lower hydro inflows and increasing costs across the business.

Retailers and decliners

The big news in retail was Warehouse Group’s $1 sale of Torpedo7 to Tahua Partners. The company’s shares fell 2.3% to $1.25 before rising back up to $1.31, ending the day 3.1% up.

Coriolis Research director Tim Morris told BusinessDesk the sale suggests the group needs more robust due diligence.

“The Warehouse has had a number of high-profile challenges with new businesses over the years – Clint’s and Silly Solly’s in Australia circa 2000, the aborted entry into food in the mid-2000s, now this,” he said.

Hallenstein Glasson also had a positive day. The clothing retailer gained 3% to $5.78 after net profit for the six months to Feb 1 was slightly higher on the year despite a tough retail environment.

It wouldn’t be a day at the NZX without a decliner. Heartland fell 1.58% to $1.30, which likely related to the company falling out of the FTSE small cap index, Hobson Wealth's Gordon said.

Tags: Market Close

« NZ sharemarket turns positive after days of declineMarket ends on a slight upnote after week of poor results »

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AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
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China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
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Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
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Heartland Bank - Reverse Mortgage - - - -
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HSBC Premier LVR > 80% - - - -
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Kainga Ora - First Home Buyer Special - - - -
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Resimac - LVR < 90% 9.84 9.09 8.59 8.29
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SBS Construction lending for FHB - - - -
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Westpac 8.64 7.89 7.35 7.25
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Westpac Offset 8.64 - - -
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Median 8.64 7.29 7.32 6.65

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