Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


MARKET CLOSE: NZ shares fall as Spark earnings disappoint

Thursday 16 February 2017 05:31 PM

MARKET CLOSE: NZ shares fall as Spark earnings disappoint, Sky TV in merger spat

By Sophie Boot

Feb. 16 (BusinessDesk) - New Zealand shares dropped, led by Spark New Zealand as company earnings show the telecommunications sector is experiencing stiff competition, while Sky Network Television fell as its merger continues to attract opposition. A2 Milk Co and Fletcher also declined.

The S&P/NZX50 Index fell 80.05 points, or 1.1 percent, to 7,099.98. Within the index, 22 stocks dropped, 17 rose and 11 were unchanged. Turnover was $134.4 million.

Spark was the worst performer, down 4 percent to $3.56. The country's biggest telecommunications company lifted first-half earnings 3.5 percent to $178 million as the acquisition of Computer Concepts bolstered revenue from its IT services unit and got an early dividend from its stake in the Southern Cross trans-Pacific cable, and affirmed its annual earnings outlook.

"It probably, as a headline number, looked to be in line with expectations," said James Lindsay, senior portfolio manager at Nikko Asset Management. "The Southern Cross dividend was a bit higher than people's expectations, the manager suggested that shifted about $9 million from the second half into the first half, and they've lost a bit of share of the mobile market and broadband as well, which probably surprised the market a bit, and they upped their capex. A combination of that has led to a mild disappointment in the result.

"Overlaying that, Telstra announced their result which was a poor result which has driven both stocks down. It shows the competitive dynamic in the industry still remains pretty high - Spark have talked about further competition in the market hurting them and broadband remaining competitive," Lindsay said. Dual-listed Australian telco Telstra fell 4.7 percent to $5.25 on the NZX.

Sky TV dropped 2 percent to $4.50. Sky says it won't delay a merger with Vodafone New Zealand to give other telecommunications companies, including Spark, time to appeal it in court if the transaction is approved by the Commerce Commission. Simon Moutter, Spark chief executive, told an analyst briefing he is considering options after that rejection and will likely make a decision today.

"It was up extremely strongly and unusually yesterday, so it's given up its performance," Lindsay said. "It was an odd request that Spark has made to Sky, and it may suggest it's going towards a decision that may reflect the merger going ahead."

A2 Milk dropped 3.9 percent to $2.46, Fletcher Building fell 2.7 percent to $10.11, and Meridian Energy declined 2.2 percent to $2.64.

Precinct Properties New Zealand dipped 0.4 percent to $1.23. The listed commercial property investor lifted first-half profit 12 percent to $39.1 million as its overall occupancy rate rose to 99 percent and demand for its Commercial Bay development remained strong.

Ebos Group was the best performer, up 2.2 percent to $18.44. Air New Zealand rose 1.9 percent to $2.135 and Mainfreight advanced 1 percent to $21.50.

Units in the Fonterra Shareholders' Fund gained 0.3 percent to $6.22. The Auckland-based cooperative said in its latest Global Dairy update to the NZX that it sees a smaller decline in local milk production after better-than-expected collections followed unfavourable weather during peak milking months. Fonterra had been picking the 2017 season collection to fall 7 percent after a very wet spring hurt North Island milking operations, but is now forecasting a 5 percent decline as "collections have shown signs of improvement" since then.

Outside the benchmark index, Skellerup Holdings sank 6.2 percent to $1.51. First-half profit fell 7.5 percent to $8.9 million due to weaker sales to the mining sector in Australia and higher finance costs for a new factory in Christchurch. Revenue declined 9.5 percent to $97.3 million. The result is weaker than the $100.5 million revenue and $10 million profit forecast by brokerage Forsyth Barr.

Abano Healthcare was unchanged at $8.70. Healthcare Partners Holdings will consider mounting a full takeover bid for Abano provided it can get access to the medical investor's books, and has raised its bid for a controlling stake to $10.16 per share from $10 in the meantime. Healthcare Partners has attracted 1 percent of Abano's shares since mounting its offer to build a 50.01 percent stake in the business. The Hutsons and Reeves already own about 19 percent, meaning acceptances would probably be scaled if they achieve control. The offer closes on March 3.

(BusinessDesk)

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news