MARKET CLOSE: NZ stocks rise on earnings; Nuplex leads gainers, Goodman Fielder falls
By Jason Krupp
Aug. 22 (BusinessDesk) - New Zealand stocks rose for the first time in three sessions, with a spate of stronger earnings helping the local bourse shake off a pull back in risk sentiment on global equity markets. Nuplex Industries Ltd. led gainers, and Goodman Fielder Ltd. fell.
The NZX 50 Index rose 6.59 points, or 0.2%, to 3,274.43. Within the index, 15 stocks rose, 23 fell and 12 were unchanged. Turnover was a lower-than-usual $75.7 million.
"The market has been given some confidence from the financial reports that have come through today," said Grant Williamson, a director at Hamilton Hindin Greene. "What has surprised investors is that a lot of the companies have been doing a good job of managing the high cost of the New Zealand dollar."
Nuplex shares rose 6.8% to $2.53 after the industrial chemicals and resins manufacturer posted a 3.6% increase in full-year profit, beating its guidance, as sales rose and the company recognised fewer impairments and one-time costs.
Profit rose to $66.5 million, or 34.2 cents a share, in the 12 months ended June 30, up from $64.2 million, or 33.7 cents, a year earlier, the company said in a statement today. Sales rose 7.9% to $1.58 billion.
"Investors were expecting the company to miss its guidance because of rising raw material costs, and they got a pleasant surprise today," Williamson said.
Hellaby Holdings Ltd. rose 6.3% to $2.55 after the diversified investment group posted a 49% increase in full-year profit on improved earnings from footwear and equipment, and lower interest costs after its raised equity capital and repaid debt.
Net profit rose to $15.4 million, or 22.6 cents a share, from $10.3 million, or 20.3 cents a year earlier, the company said in a statement today. The per-share earnings reflect the dilutionary impact of the issue of 21.85 million shares from its rights offer.
Contact Energy Ltd. rose
2.8% to $5.16 after the country's biggest listed electricity
company posted flat full-year earnings for a third year in a
row, citing wet weather, intense retail competition and the
late commissioning of
new peaking plant as the reason for the lack of profit growth.
The company reported a statutory after tax profit of $150.3 million in the year ended June 30, down 2.8% on the previous year’s result, and exactly in line with predictions from brokers Forsyth Barr.
"The result was flat but a number of investors and brokers were expecting a dismal result due to the customer churn Contact experienced over the year," Williamson said.
Restaurant Brands NZ Ltd., the fast food franchise holding company, rose 2.7% to $2.32.
Skellerup Holdings, the rubber goods and milking equipment manufacturer, rose 2.5% to $1.24.
Air New Zealand Ltd., the national carrier, rose 0.9% to $1.09. The airline last week signaled its intention to raise up to $150 million in five-year bonds next month. The unsecured, unsubordinated fixed-rate bonds would have a maturity date of Nov. 15, 2016, the company said in a statement to the NZX.
Goodman Fielder led decliners on the exchange, with the stock falling 11.7% to a historic low of 91 cents after it last week signaled that full year net earnings would likely miss its April 28 guidance range of A$140 million to A$150 million. The April guidance was also a downgrade as Goodman had previously said earnings would match last year’s A$161 million.
"The company said it was undertaking a strategic review, which normally means things do need to change," said Williamson. "Still, they are a solid brand name and the company has been around a long time, so at some stage you would expect things to turnaround."
Pumpkin Patch Ltd., the children's clothing chain, fell 3% to 97 cents.
AMP Ltd., the Australian wealth manager, fell 1.9% to $5.25.
Property Trust Ltd., the listed property investor, fell 1.6%
New Zealand Refining Co., the operator of the country's only oil refinery, fell 1.5% to $3.20.
The company today posted a 7.5% increase net earnings to $31.2 million for the six months ended June 30, on a 16.9% increase in half-year revenue to $157.9 million.
Cavalier Corp., the listed carpet maker, fell 1.4% to $3.50. The company today reported normalised annual net profit and revenue rose 4%, thanks to a strong performance in Australia, while tax adjustments pushed the bottom line up 60%.
Net profit for the year ended June 30 rose to $18.2 million from $11.4 million the previous year although the latest result was boosted by a $0.9 million positive tax adjustment while the previous result was depressed by a $5.3 million tax charge. Before those one-off adjustments, profit after tax was $17.3 million compared with $16.6 million the previous year.