29 January 2014
South Island firms continue to reach new heights
Deloitte South Island Index passes the $10 billion mark for the first time
South Island listed companies have continued to perform well, breaking the $10 billion barrier for the first time since
the inception of the Deloitte South Island Index in 2007.
The 24th edition of the Deloitte South Island Index, for the quarter to 31 December 2013, saw the index grow by $995.8
million (10.0%) in terms of market capitalisation. This result ensured that the Index completed the 2013 calendar year
with a perfect score of growth in all four quarters, up $3.59 billion (48.9%) during the year to 31 December 2013.
The Index’s 10.0% quarterly growth placed it ahead of benchmark indices during the quarter to 31 December 2013. In
comparison, the Dow Jones and the ASX All Ords achieved the next highest growth rates of 9.6% and 2.6% respectively,
while the NZX 50 finished neutral over the same period.
Scott McClay, a corporate finance partner in Deloitte’s Christchurch office, says that the South Island Index’ has
continued its remarkable run outperforming the other tracked indices.
“This dominance, combined with the Index breaking the $10 billion barrier, clearly indicates a boom period for investor
confidence in South Island listed companies,” says Mr McClay.
“This positive trend is especially encouraging given the number of non-listed businesses that are struggling in
post-earthquake Christchurch and the well-publicised recent losses of significant Dunedin employers.”
The standout performance of the quarter to 31 December 2013 came from Pacific Edge, which increased its market
capitalisation by 184.9% following the issuance of just over 37.8 million shares and the increase of its share price by
$0.80 (150.9%) to $1.33 per share.
“The phenomenal percentage growth of the Dunedin-based company saw Pacific Edge almost triple in size during the quarter
to 31 December 2013,” says Mr McClay.
”The exceptional increase in the company’s share price followed Pacific Edge’s two announcements in October that it had
signed agreements with FedMed and America’s Choice Provider Network (ACPN) to provide 54 million Americans with access
to Pacific Edge’s Cxbladder, a cancer detection test.”
The Index’s top performer for the quarter ending 31 December 2013, in terms of the dollar value of their market
capitalisation, was Ryman Healthcare. Ryman’s market capitalisation increased by $450.0 million (12.9%) over the
quarter, on the back of their announcement of an underlying profit of $58.5 million for the first half of the year – a
new record for the company and up 22% on the previous year. This marked the ninth quarter in a row that Ryman Healthcare
has achieved growth.
The biggest decline for the quarter to 31 December 2013 came from EBOS Group, which suffered a reversal of its recent
results losing $51.9 million in market capitalisation, a decline of 3.5%.
“This greater-than-normal dollar value decrease is a symptom of the company’s newly found size after the Symbion
acquisition in the middle of 2013. It is foreseeable that EBOS Group may have big swings in the dollar value of its
market capitalisation due to its significantly increased scale,” says Mr McClay.
Seven of the eight industry sectors in the Deloitte South Island Index posted positive movements in the quarter to 31
December 2013. The Biotechnology sector was the leading performer, gaining $288.0 million (173.2%) and almost tripling
in size from the start of the quarter. The astounding growth of the sector was mainly due to the issuance of new shares
and increases in share price for Pacific Edge and BLIS Technologies.
Only the Manufacturing & Distribution sector did not display positive growth, experiencing a decline in market capitalisation of 2.6%. Three of
the four companies in the sector declined over the quarter, with the exception being Skellerup Holdings which grew by
5.5%.
To see the full Deloitte South Island Index quarterly report, go to www.deloitte.com/nz/southislandindex.
About the Deloitte South Island Index
The Deloitte South Island Index measures movements in market capitalisation, tracking the performance of 33 listed
companies with a registered office and/or a substantial portion of their operations in the South Island.
About Deloitte in New Zealand
Deloitte New Zealand brings together more than 1000 specialist professionals providing audit, tax, technology and
systems, strategy and performance improvement, risk management, corporate finance, business recovery, forensic and
accounting services. Our people are based in Auckland, Hamilton, Rotorua, Wellington, Christchurch and Dunedin, serving
clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with
ambition to grow.
Deloitte provides audit, tax, consulting and financial advisory services to public and private clients spanning multiple
industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class
capabilities and high-quality service to clients, delivering the insights they need to address their most complex
business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of
excellence.
For more information about Deloitte in New Zealand, go to our website www.deloitte.co.nz.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its
network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/nz/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
ENDS