MARKET CLOSE: NZ shares gain; Air NZ, A2 up after earnings, Fonterra rises
Aug. 29 (BusinessDesk) – New Zealand shares rose as Air New Zealand and A2 Corp posted earnings growth, and Fonterra Shareholders’ Fund gained a day after the dairy group’s whey protein tested free of a bacteria that could cause botulism.
The NZX 50 Index climbed 10.788 points, or 0.2 percent, to 4520.504. Within the index, 21 stocks rose, 20 fell and nine were unchanged. Turnover was a higher-than-average $160 million, with large volumes of Guinness Peat Group and Heartland New Zealand.
Air New Zealand rose 1.5 percent to $1.39 after reporting that annual profit more than doubled annual, beating estimates, as it squeezed more revenue from a rising volume of passengers and benefited from favourable foreign exchange movements. Trading so far in 2014 was “encouraging,” it said.
“It’s always refreshing to see a New Zealand company do well in a highly competitive arena on the global scene,” said Rickey Ward, head of equities at Tyndall Investment Management. Investors want to be sure the airline keep control of costs, he added.
A2, which markets milk products with a protein variant claimed to have health benefits, rose 2.8 percent to 74 cents, having touched a record 77 cents, after posting a 51 percent jump in sales to $94.3 million in the 12 months ended June 30 and more than doubled operating earnings to $10.6 million.
“It’s been a very good growth stock, and if they can manage the sales growth they want, it looks like a very good New Zealand success story,” said Grant Williamson, director at Hamilton Hindin Greene.
Units of the Fonterra fund gained 2.5 percent to $7.05. The company today briefed investors on the saga of its contaminated whey protein concentrate scare, which was shown yesterday to be groundless because the bacteria identified aren’t a food safety risk.
Guinness Peat Group, the owner of the Coats threadmaking company, gained 2.8 percent to 55 cents, with 60 million shares traded. The company said yesterday it is focusing on cutting costs as an investigation by the UK pensions regulator delays its plan to wind up most of its investments and focus on Coats.
Heartland, New Zealand’s newest bank, was unchanged at 87 cents as 13 million shares changed hands.
Pyne Gould Corp rose 3.3 percent to 31 cents after the financial services firm controlled by George Kerr returned to profit in the latest year and beat guidance by 48 percent. The firm made a profit of $44.4 million as it reaped $25 million from asset sales and posted stronger operational returns.
Shares in Mercer Group were unchanged at 22 cents after the stainless steel fabricator more than doubled annual earnings before interest, tax, depreciation and amortisation to $2.5 million, and predicted bigger profits in the coming year.
Lyttelton Port Co was unchanged at $2.70 after Christchurch’s ocean hub reported a 5.3 percent fall in annual profit, adjusted for the earthquake. That was near the bottom end of guidance, though the port reported stronger volumes going through the hub.
Hellaby Holdings slipped 0.7 percent to $2.86 after the diversified investor reported a 5.8 percent fall in annual profit to $18.2 million, and indicated more acquisitions were on the horizon after this year’s purchase of a majority stake in oil and gas services company Contract Resources.
Rubicon dropped 2.9 percent to 34 cents after the former Fletcher Challenge unit returned to positive annual earnings as subsidiary Tenon rode on the recovery of the US housing market. The company’s ArborGen investment has rejigged its focus to speed up its commercial research and development. Shares in Tenon sank 6.4 percent to $1.31.
Tourism Holdings climbed 5 percent to 63 cents after the rental van operator was at the lower end of earnings guidance on weak demand across the Tasman. Earnings before interest, tax and financing costs fell 11 percent to $14.6 million in the 12 months ended June 30.