MARKET CLOSE: NZ shares rally as Fletcher, Auckland Airport beat estimates
Aug. 21 (BusinessDesk) – New Zealand shares rose, after Fletcher Building and Auckland International Airport posted annual earnings that beat estimates. Trade Me fell after saying 2012 earnings growth would slow as it ramps up investments.
The NZX 50 Index rose 43.152 points, or about 1 percent, to 4551.508. Within the index, 25 stocks rose, 18 fell and seven were unchanged. Turnover was a higher-than-average $293 million, with Auckland Airport accounting for about $90 million and Fletcher making up about $57 million.
Fletcher, the biggest company on the NZX 50, rose 6.2 percent to $8.72 after reporting annual profit of $326 million, on strong results from its New Zealand business and an absence of the year-earlier charges in Australia, where trading is expected to remain weak. Sales fell 4 percent. New Zealand would continue to drive earnings growth, it said. Profit beat First NZ Capital’s estimate of $304 million.
“The result at face value looks slightly ahead of market expectations albeit revenue is lower and there’s questions over the size of abnormals,” said Rickey Ward, head of equities at Tyndall Investment Management. “Construction division was the standout, roughly $20 million higher than market expectations and a result of Christchurch rebuild activity.”
Auckland International Airport climbed 1.5 percent to $3.30 after posting a 25 percent gain in full-year profit that beat estimates on increased passenger and plane numbers and a pick-up in the value of its property portfolio.
Mark Lister, head of private wealth research at Craigs Investment Partners, said the airport’s property development interests deliver a more diverse revenue stream that isn’t subject to the same regulation as its traditional business.
Trade Me fell 4.7 percent to $4.48 after New Zealand’s largest online auction site said earnings growth would slow in the coming year as it invests more in its business. Pretax earnings gained 12 percent in the year ended June 30.
“There is going to be a significant increase in the cost base and capital expenditure over the next year,” said Shane Solly, who helps manage more than $200 million at Mint Asset Management. “Trade Me is trading up to some extent – it will take time to see how the investment pays off.”
Telecom rose 1.5 percent to $2.315 ahead of its results on Friday. Network company Chorus, due to report next week, gained 1.7 percent to $2.95.
Pay-television company Sky Network Television rose 2.7 percent to $5.37. The company said today it has agreed a resale and distribution agreement with Vodafone after the mobile phone company bought Telstra Corp’s New Zealand unit last year. The agreement brings together previously separate arrangements with Vodafone and Telstra, allowing Vodafone to resell Sky TV’s service and distribute its programmes to households via its own broadband network.
Air New Zealand rose 3.6 percent to $1.43 after government figures showed New Zealand welcomed 183,700 visitors in July, up 6 percent from a year earlier. More visitors arrived from China, the UK, and the US as well as from Australia.
Port of Tauranga, which reports its earnings tomorrow, rose 0.1 percent to $14.70.
Ebos Group climbed 1.6 percent to $9.85. Yesterday it posted a 5.5 percent gain in annual profit, meeting its prospectus forecast, and chief executive Mark Waller said the company has two potential acquisition targets after its biggest ever deal buying Australia’s Symbion for $1.1 billion this year.
Z Energy rose 1.3 percent to $3.79 in its third day of trading.