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

 

MARKET CLOSE: NZ shares up as Comvita, A2 rebound

MARKET CLOSE: NZ shares up as Comvita, A2 rebound from weakness, Steel & Tube keeps dropping

By Sophie Boot

May 25 (BusinessDesk) - New Zealand shares gained as Comvita and A2 Milk Co recovered from selling, while Air New Zealand and Steel & Tube Holdings fell.

The S&P/NZX 50 Index rose 47.63 points, or 0.6 percent, to 8,638.4. Within the index, 32 stocks rose, 13 fell and five were unchanged. Turnover was $157 million.

Comvita led the index higher, up 2.8 percent to $5.96. The manuka honey company's shares had been down 14 percent this week since Monday, when it pulled out of talks with an unnamed third party looking to take it over when it couldn't reach a deal on price.

"That's obviously had a fairly good shellacking since the supposed bidder didn't turn up," said David Price, broker at Forsyth Barr. "It's quite interesting now, that price must be pretty close to where the supposed bidder would probably have been if there was a void between the buyer and seller. That stock has been plagued with disappointment, downgrade upon downgrade, so they're going to have to do a lot of work to regain the market's confidence."

A2 Milk gained 2.6 percent to $10.94. The stock, one of the most volatile on the index, has also had a turbulent week. The milk marketer's shares slumped 13 percent last week and a further 9.3 percent in the first half of this week after it missed expectations, but rebounded yesterday and continued to make up lost ground today.

Spark New Zealand rose 2.5 percent to $3.55. It expects annual earnings to fall by as much as 2.5 percent this year as it brings forward restructuring costs and accelerates its 'Quantum Programme' to transform the company into the operator with the lowest costs.

It anticipates earnings before interest, tax, depreciation and amortisation of between $971 million and $991 million in the year ending June 30 as it doubles this year's restructuring costs to $50 million-to-$55 million.

Synlait Milk gained 2.2 percent to $10.38, and Tourism Holdings advanced 1.7 percent to $6.61.

Air New Zealand was the worst performer, down 2.3 percent to $3.225. SkyCity Entertainment Group dropped 2 percent to $3.92 and Sanford fell 1.2 percent to $7.7.5

Outside the benchmark index, Steel and Tube dropped 4.3 percent to $1.55. The stock has dropped 22 percent this week following a significant downgrade. It now expects to post a loss before interest and tax (ebit) of about $38 million this financial year, from positive ebit of $31.1 million a year earlier, and breach its banking covenants after a restructuring that will see it exit its plastics business and write down the value of its assets.

"The issue for them is the balance sheet, it probably needs a bit of attention. That's probably the next focus," Price said. "It's yet another company in a sector where, if you plot building activity it's been going one way for a period of time, and if you plot Metro Glass, Steel & Tube, Fletcher Building on the same graph they'll be going inversely proportional the other way, which doesn't make any sense whatsoever. None of them have covered themselves in any glory, at a time when they really should be."

Veritas Investments dropped 10 percent to 18 cents. Director Michael Morton will step down from the board next month, after a meeting where shareholders will vote on whether to agree to a $27.5 million loan from Japanese investment bank Nomura Holdings.

Earlier this year, Morton bought the business and assets of the Mad Butcher franchisor, of which he was chief executive, from Veritas for $8 million, less than a quarter of what he sold it to the food and beverage investor in a reverse listing almost five years earlier.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Judicial Review: China Steel Tarrif Rethink Ordered

On 5 July 2017 the Minister determined not to impose duties on Chinese galvanised steel coil imports. NZ Steel applied for judicial review of the Minister’s decision. More>>

Debt: NZ Banks Accelerate Lending In June Quarter

New Zealand's nine major lenders boosted lending at the fastest quarterly pace in almost two years as fears over bad debts subsided. More>>

ALSO:

Balance Of Trade: Annual Current Account Deficit Widens To $9.5 Billion

New Zealand’s current account deficit for the year ended June 2018 widened to $9.5 billion, 3.3 percent of GDP, Stats NZ said today. More>>

ALSO:

Talking Up The Economy: NZD Gains On PM's Mistaken GDP Comment

Her comments were downplayed by her chief press secretary who said she was referring the government's June year financial statements and had "made a mistake." More>>

ALSO: