NZ sharemarket falls 0.6% after Monday's surge

The New Zealand sharemarket gave back half of the gains from the day before – when record volumes were traded – but software firm Gentrack surged to a new all-time high.

Tuesday, November 26th 2024, 6:35PM

by BusinessDesk

The S&P/NZX 50 Index fell early, never recovered and closed at 13,113.19, declining 82.89 points or 0.63% following Monday’s rise of 1.18% on trade worth more than $1.9 billion.

A total of 46.45 million shares worth $172.48m changed hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said it was a broad sell-off from the day before when “we saw a net inflow of investment money”.

Market leader Fisher and Paykel Healthcare fell $1.45 or 3.7% to $37.76 on trade worth $18m.

Robertshawe said there was a report that Donald Trump will put a 25% tariff on all Mexican exports to the United States. Fisher and Paykel Healthcare has a production facility in Mexico.

The Dow Jones Industrial Average hit a new high in the US after rising 440 points or 0.99% to 44,736.51 points after Trump selected fund manager Scott Bessent as the Treasury secretary.

The markets believe Bessent will help guide the economy without sparking inflation and will help mitigate some of Trump’s most extreme protectionist policies, such as taxing imports.

Gentrack

At home, Gentrack, providing software for utilities and airports, rose $2.47 or 24.36% to a new high of $12.61 after increasing revenue by 25%. The Gentrack share price has risen from $1.53 in October 2022 and climbed 144% over the past 12 months – the best-performing stock on the NZX.

For the year ending September, Gentrack’s revenue increased 25.5% to $213.24m, and net profit was down 5% to $9.54. Gentrack is not paying a dividend and wants to reinvest instead.

Utilities revenue, excluding $27.6m from insolvent customers in the 2023 financial year, rose 51%, and new customer wins in the UK and the Middle East powered its airports Veovo business to a 45.5% increase in revenue to $31.9m.

Veovo has added digital solutions to more than 140 airports in 23 countries.

Gentrack told the market it is still confident of growing revenue by more than 15% compound annual growth rate and operating earnings (ebitda) margin of 15-20% after development costs.

Robertshaw said Gentrack was at the top end of its earnings guidance, but it didn’t provide ebitda guidance for the next 12 months, suggesting some uncertainties.

Other stocks

Spark declined 12c or 4.03% to $2.855 after falling 5.29% to A$2.595 (NZ$2.88) in Australia (at 6pm NZ time).

Chorus was down 10.5c to $8.995; Fletcher Building eased 7c or 2.15% to $3.18; a2 Milk shed 12c or 1.92% to $6.14; and Comvita declined 9c or 8.18% to $1.01.

Meridian Energy was up 12c or 1.99% to $6.914; T&G Global increased 10c or 6.99% to $1.49; Turners Automotive gained 8c to $5.16; Sanford added 11c or 2.56% to $4.40; and Kiwi Property collected 2.5c or 2.7% to 95c.

Other decliners were Serko, down 24c or 5.9% to $3.83; Michael Hill, decreasing 4c or 5.88% to 64c; Goodman Property, shedding 5c or 2.31% to $2.11; and Santana Minerals, falling 5c or 8.33% to 55c.

Cancer diagnostics company Pacific Edge declined 1.1c or 7.8% to 13c after reporting a 16.3% fall in revenue to $10.96m and a steady net loss of $14.5m for the six months ending September compared with the previous corresponding period. Cxbladder tests were down 22% to 14,233.

Pacific Edge said it was awaiting the outcome of continued Medicare funding, the American Urological Association review on standards of care, and Centres for Medicare and Medicaid Services finalising pricing recommendations for its next-generation test Triage Plus – all having the potential to grow Cxbladder test volumes and revenue.

Channel Infrastructure was up 3.4c or 1.93% to $1.80 after raising $22.5m from institutional shareholders through a one-for-12.12 share entitlement offer, representing 14m new shares. The same offer is going to retail shareholders.

Channel has made three storage contracts expected to deliver $120m in revenue over 15 years for an investment of $55m-$66m in capital expenditure. Channel has a 10-year jet fuel storage with Z Energy at Marsden, a seven-year contract to store transmix for Bp, Mobil and Z Energy, and a 15-year contract to develop a bitumen import terminal for Higgins.

Heartland Group, down 1c to 98c, told the market it was committed to delivering a 12-14% return on equity and a net profit of $200m by the end of the 2028 financial year.

Heartland expects a net interest margin of more than 4% in the 2025 financial year. Reverse mortgages continue to perform well, growing 16.8% for the year to date, but motor and asset finance is facing subdued demand, down 2.5% and 9.9% year to date.

Tags: Market Close