MARKET CLOSE: NZ shares fall ahead of busy earnings season period; Sky TV, Mercury drop; Synlait, a2 gain
By Sophie Boot
Feb. 19 (BusinessDesk) - New Zealand shares fell in quiet trading ahead of a busy mid-week reporting period, led lower
by Sky Network Television and Mercury NZ, while Synlait Milk and a2 Milk Co rose.
The S/NZX50 Index declined 10.06 points, or 0.1 percent, to 8,115.25. Within the index, 22 stocks rose, 20 fell and eight
were unchanged. Turnover was $67 million.
"We're under-performing a little, it's a reasonable subdued performance to start the week which is probably not
surprising as there's an avalanche of results coming in the rest of the week," said Mark Lister, head of private wealth
research at Craigs Investment Partners. "I suspect it's a bit of wait-and-see approach from investors, there will be no
shortage of news flow later in the week."
Sky TV led the index lower, down 2.5 percent to $2.73, with Mercury falling 2 percent to $3.265.
Freightways fell 1.2 percent to $7.44. It reported a gain in first-half revenue although profit fell 8 percent to $31.4
million on the impact of a year-earlier one-time gain and a narrower earnings margin at its express package and business
mail division. Sales rose 7.1 percent to $292 million.
"It was pretty much in line with expectations, there wasn't a huge amount for people to latch onto to drive the share
price one way or the other," Lister said.
NZX dipped 0.9 percent to $1.10. It boosted annual profit 62 percent, cutting costs by trimming down its agri publishing
unit and refocusing on its core markets business which relied on a glut of new debt listings to offset the lack of new
equity initial public offerings and several delistings in the year.
Synlait was the best performer, up 5.2 percent to $7.05. The company has not made any new announcements and the stock
traded about 2 percent higher through the morning but rose above $7 after 3pm, hitting an intra-day high of $7.09 before
pulling back a little towards the close. Lister said he would expect the stock to have gained slightly as it often
follows a2 Milk up, but the large gain today didn't corroborate.
A2 itself rose 0.4 percent to $9.28, and hit a record $9.44 during the session.
"After the stunning year last year, it's up another 16 percent this year - it has gone on to even higher highs. They
report Wednesday so the market is obviously betting on a pretty good result," Lister said.
Outside the benchmark index, Evolve Education fell 19 percent to 61 cents after the early childhood education group gave
its second full-year profit warning and said it is likely to write down goodwill on acquisitions and cut its dividend.
Net profit before one-time items is expected to be $11 million to $12 million in the 12 months ending March 31, down
from previous guidance of $14 million to $15 million.
(BusinessDesk)