NZ sharemarket dips despite positive earnings reports

Strong earnings results from Infratil and Turners Automotive, reporting a record year, could not stem a half a percent fall on the New Zealand sharemarket.

Tuesday, May 21st 2024, 6:26PM

by BusinessDesk

The S&P/NZX 50 Index was on a gradual slide all day and closed at 11,675.99, down 59.72 points or 0.51%.

There were 73 gainers and 58 decliners over the whole market on volumes of 26.56 million share transactions worth more than $112.77m.

Utilities investor Infratil declined 55c or 4.89% to $10.70 on trade worth $19.24m, after reporting a 75.7% rise in revenue to $3.323 billion and 50.6% increase in net profit to $845.5m for the year ending March. It is paying a final dividend of 13c a share on June 25.

Infratil’s proportionate operating earnings (ebitdaf) rose 63% to $864m, mainly as a result of taking full ownership of One NZ, formerly Vodafone. The ebitdaf guidance for the 2025 financial year was increased to $980m-$1.03b. Infratil has $820m available to find growth.

Matt Goodson, managing director of Salt Funds Management, attributed Infratil’s share price fall to the sharp rise the day before and slightly lower-than-expected earnings guidance.

“Infratil has a lot of moving parts and it was a complex result,” he said. “The guidance for One NZ and CDC data centres – which make up a lot of its business – was a touch lighter than what the bullish analysts expected.”

Manawa Energy, 51% owned by Infratil, was down 20c or 4.5% to $4.24.

Record earnings

Turners Automotive gained 12c or 2.93% to $4.22 after reporting record earnings, with revenue increasing 7% to $416.97m and net profit up 1.5% to $32.97m for the 12 months ending March.

Turners is paying a final dividend of 7.5c on July 26. The auto retail division increased profit 27% to $31.8m after opening two new branches. Turners said it is well placed to exceed its $50m profit target in the 2025 financial year and has set a new goal of $65m in the 2028 financial year.

Goodson said Turners, like other cyclical stocks, had been hard-hit over the past few weeks but they are savvy operators and the result showed the strength of their market position.

Among fellow car dealers, 2 Cheap Cars was up 2c or 2.56% to 80c, and Colonial Motor Co was down 20c or 2.44% to $8.

The market was underpinned by a2 Milk up 17c or 2.35% to $7.39, and Mercury Energy adding 12.5c or 1.95% to $6.55.

Port of Tauranga gained 14c or 2.89% to $4.99; Heartland Group increased 2c or 2% to $1.02; ANZ Bank added 76c or 2.52% to $30.94; and Arvida Group improved 4c or 4.17% to $1.

Rakon was up 4c or 4.55% to 92c; Argosy Property increased 5c or 4.67% to $1.12; Comvita also gained 5c or 2.94% to $1.75; and Eroad added 3c or 3.45% to 90c.

Software firm Gentrack was up a further 6c to $9.50 after earlier reporting its best first-half result for the airports business, with revenue increasing 49.4% to $15.5m. Utilities (energy and water) revenue was up 17% to $86.5m.

Terms settled

SkyCity Entertainment gained 3c to $1.76 after announcing an agreement with the Internal Affairs Department over anti-money laundering breaches between 2018 and 2023.

SkyCity will pay $4.16m on approval by the high court, and the casino operator is now paying a total of $77.16m penalties for similar breaches on both sides of the Tasman.

Fisher & Paykel Healthcare was down 49c to $28.36; Fletcher Building decreased 8c or 2.68% to $2.91; Stride Property fell 7c or 5.43% to $1.22; and Investore declined 3c or 2.86% to $1.02.

Michael Hill shed 3c or 5.45% to 52c; KMD Brands was down 2.5c or 5.81% to 45.5c; Delegat Group declined 19c or 3.55% to $5.16; and Seeka decreased 12c or 4.94% to $2.31.

Pacific Edge, down 0.007c or 6.86% to 9.5c, reported a 22% increase in full-year operating revenue to $29.3m, lifted by a 2% rise in commercial Cxbladder test volumes in the United States market. Its net loss was $29.53m compared with $26.96m in the previous year.

Pacific Edge is still counting on Medicare funding coverage in the US, with a decision expected by July 26.

Tags: Market Close