MARKET CLOSE: NZ shares rise, led by A2 and Synlait; Pushpay falls
By Sophie Boot
May 17 (BusinessDesk) - New Zealand shares rose, led by A2 Milk Co and Synlait Milk while Pushpay fell after annual
earnings met its guidance, disappointing some upbeat investors.
The S/NZX 50 Index rose 47.87 points, or 0.6 percent, to 8,603.38. Within the index, 27 stocks rose, 15 fell and eight were
unchanged. Turnover was $138 million.
Yesterday the index dropped 1.8 percent, the worst day the market has had since February, led lower by A2 Milk Co after
its outlook disappointed investors. Today, A2 led the market's gains, though much attention was turned to the first
Budget for the Labour-led government.
"There wasn't a lot in the Budget for financial markets, I guess that's good - a boring budget that doesn't really rock
the boat is probably what's called for, especially when you're a new government that's trying to prove yourself to the
business community and convince people you are going to be a prudent manager of the books," said Mark Lister, head of
private wealth research at Craigs Investment Partners.
A2 rose 4.2 percent to $11.77. Yesterday, the shares dropped 13.7 percent after a trading update disappointed investors
who had been optimistic about the milk marketing firm's outlook.
"It's certainly a lot more stable than we saw yesterday, while it's still off those highs it does tell us that the
initial moves were a bit knee-jerk so it's trading reasonably well," Lister said. "A few bargain hunters have been happy
to come in and pick a bit up around the $11 mark, which is a bit cheaper than they've seen it for a couple of months
now."
Synlait Milk, A2's supplier which also lost ground yesterday, rose 1.9 percent to $10.50.
Infratil gained 1.9 percent to $3.275. The company beat its annual earnings guidance and said it expects profitability
to increase in the future on the back of its recent investments.
The infrastructure investor reported consolidated underlying earnings before interest, tax, depreciation, amortisation
before adjustments for fair value movements, realisations and impairments of $552.4 million in the year ended March 31,
ahead of $519.5 million last year and above its forecast for $510 million to $525 million, due to associate investment
valuations.
"It was in line with expectations and a reasonably solid result. The market is pretty happy with that and comfortable,
the question mark for Infratil is what's next on the horizon in terms of investments. They've got plenty of cash,
they've got plenty of debt facilities," Lister said.
Sky Network Television rose 1.7 percent to $2.35 and Vital Healthcare Property Trust gained 1.5 percent to $2.02.
Pushpay Holdings was the worst performer, down 5.1 percent to $3.88. The mobile payments app company narrowed its net
loss as it doubled revenue in 2018, in line with forecasts. Its net loss was $23.3 million in the year ended March 31,
from $25.3 million a year earlier, while revenue rose to $70.2 million from $34.3 million in the prior year.
Pushpay's app has gained traction in the US faith sector, where it is now in use in 54 of the top 100 churches and has
transactions of US$3 billion based on annualised monthly figures.
"It's probably a similar situation to what we've seen with A2 Milk - the numbers look very good, in terms of growth and
progress they're making, but it's a stock that's had a very strong run in recent years and expectations have been high,
there's a lot of optimism built into the share price," Lister said. "Market expectation is just a bit too high, you
can't necessarily point the finger at the company, but sometimes the market just gets a bit too ambitious in its
expectations."
Westpac Banking Corp fell 4.2 percent to $31.54, Spark New Zealand dropped 2.2 percent to $3.49, and Comvita declined
1.4 percent to $6.90.
Outside the benchmark index, Rakon gained 10 percent to 22 cents. The high-tech components maker returned to a full year
profit, benefiting from growth in its core markets and some non-recurring gains.
Briscoe Group was unchanged at $3.50. It will reimburse staff who cashed up at the end of the day but didn’t get paid
for the time, something managing director Rod Duke says is company policy.
(BusinessDesk)