MARKET CLOSE: NZ shares rise, paced by Skellerup, Sky TV; Chorus falls
Aug. 26 (BusinessDesk) – New Zealand shares rose paced by companies that delivered on earnings expectations, including
Skellerup Holdings, Sky Network Television and Telecom. Chorus dropped after forecasting flat-to-lower 2014 earnings.
The NZX 50 Index rose 21.46 points, or 0.5 percent, to 4545.669. Within the index, 30 stocks rose, 13 fell and seven
were unchanged. Turnover was $100.5 million.
Skellerup, the industrial rubber goods manufacturer, rose 3.4 percent to $1.52. Last week the company beat its guidance
with a 23 percent decline in annual profit following a pickup in the last two months of the financial year.
Sky TV gained 3 percent to $5.49. Last Friday New Zealand’s biggest pay-TV company reported an 11 percent gain in annual
profit, beating First NZ Capital’s forecast. EBITDA gained 5 percent to $353 million.
“Sound and sustainable competitive advantages, a sound financial position and solid cash flows make Sky TV an attractive
investment proposition,” analysts at Morningstar said in a report. Still, the company “might eventually face competition
from internet providers and telecom operators once New Zealand’s broadband infrastructure improves.” Morningstar has a
‘hold’ rating on the stock.
Telecom climbed 1.1 percent to $2.26. First NZ Capital analysts maintained their ‘outperform’ rating on the stock after
the company reported adjusted full-year EBITDA of $1.04 billion, at the bottom end of its $1.04 billion to $1.06 billion
guidance.
The brokerage lowered its earnings forecasts for the next three years while saying it could still provide reasonable
shareholder returns.
“We believe Telecom is offering the best ‘value’ play across the Australian and NZ telco sector at present,” they said
in a report today.
Heartland New Zealand rose 1.2 percent to 87 cents. The country’s newest bank, reported a 71 percent slide in annual
profit after booking charges to take control of distressed assets previously managed by Pyne Gould Corp. Results were in
line with its June guidance.
Delegat’s Group dropped 3.6 percent to $4 after the wine maker said operating profit rose 3 percent to $26.3 million in
the 12 months ended June 30, lagging behind the $27.5 million expected by analysts.
“The bottom line result missed analyst expectations, not by a huge amount, but by enough to bring a few sellers in to
the marketplace,” said Grant Williamson, a director at Hamilton Hindin Greene “The share price throughout this year has
moved significantly higher, mainly on expectations that the company could continue to achieve double digit growth in its
earnings and it has missed the mark.”
Chorus fell 1 percent to $2.94 after the telecommunications network operator spent more on capital projects, including
the national fibre network, than analysts were picking and predicted flat to lower earnings in the coming financial
year.
“The roll-out itself is a huge project they’re going about, and it seems they’re so far got themselves ahead of target,
which is obviously a good thing,” said James Lindsay, portfolio manager at Tyndall Investment Management.
Wynyard Group rose 0.8 percent to $1.29 after managing director Craig Richardson said the software company spun off from
Jade Software last month is on track to meet its prospectus forecast for full-year sales after posting its interim
results.
Outdoor equipment chain Kathmandu rose 3.4 percent to $3.05, leading gains among some retailers. Hallenstein Glasson
Holdings rose 2.2 percent to $4.70 and Pumpkin Patch gained 1.1 percent to 89 cents.
Fletcher Building edged up 0.6 percent to $8.65.
(BusinessDesk)