FPH, Fletcher drive NZ stocks lower

Big falls in Fisher and Paykel Healthcare and Fletcher Building combined to drive the New Zealand sharemarket lower after what had been a strong start to the month.

Friday, May 16th 2025, 6:30PM

by BusinessDesk

The S&P/NZX 50 Index closed down 0.73% or 94.03 points at 12,786.79, with 25.2 million shares (worth $96.6m) trading.

There were 61 falls and 67 rises.

Despite the day’s decline, the market has enjoyed a strong period in the month to date.

The S&P/NZX 50 Index has gained about 7.5% over that time, making it one of the stronger performers worldwide, Harbour Asset Management portfolio manager Shane Solly said.

No significant improvement

The market was underwhelmed by Fletcher Building’s plan to disestablish its Australian division, with its operating businesses integrated into two new trans-Tasman divisions, the stock losing or 9c or 2.6% to finish at $3.37.

Fletcher chief executive Andrew Reding said that since the company’s interim results, its businesses had no significant improvement in market conditions.

Solly said the update did not get a good response from the market.

“While the restructuring is seen as a move in the right direction, the fact that there is still no evidence of a recovery in building activity was enough for the market to take the stock down by 2.6%.”

Good result 'key'

F&P Healthcare, the market’s biggest stock, dropped 52c or 1.38% to $37.06 ahead of its result on May 28.

The company’s guidance is for a net profit of $320m to $370m.

The market is looking at a net profit of $359m for F&P Healthcare, while Craigs’ forecast is at the upper end of FPH’s forecast range.

“A good result would be key to driving its share price up,” Solly said.

Energy merger 'logical'

Manawa, which will soon merge with generator-retailer Contact Energy, fell 4c to $6.36, while Contact itself dropped 22c to $9.11.

Solly said the fall in Manawa’s net profit for the year to just $0.3m, from a $24.1m profit in 2024, went some way towards backing the logic behind Manawa’s merger with the far larger and more diversified Contact.

The Contact-Manawa deal, via a scheme of arrangement, was cleared by the Commerce Commission early this month.

It requires approval of the High Court, approval by Manawa shareholders at a special meeting of shareholders and other conditions.

Contact is targeting implementation of the scheme in July 2025.

Investore 'disappointing'

Investors were not too impressed with Investore’s profit turnaround to $38.4m from the previous year’s $67.1m loss, although the stock did gain 1c to $1.15.

Over the year, Investore sold two non-core properties, Pak’nSave New Plymouth and Woolworths Invercargill, for a combined sales price above book value, and recycled capital from the sale of these properties to acquire Bunnings Westgate in Auckland.

Solly said Investore’s result was disappointing “but the management team are pretty upbeat”.

Third Age Health Services was one of the top performers of the day, gaining 20c to $3.10.

But a late surge in The Warehouse - up 6c (7.1%) to 90c - made it the best performer. The company told BusinessDesk a new chief executive would be appointed soon after a long delay.

Tags: Market Close