MARKET CLOSE: NZ shares up on A2 Milk rebound; Fletcher, Comvita drop
By Sophie Boot
May 24 (BusinessDesk) - New Zealand shares gained as A2 Milk Co rebounded from recent selling, while Fletcher Building
and Comvita fell.
The S/NZX 50 Index rose 37.54 points, or 0.4 percent, to 8,590.77. Within the index, 23 stocks rose, 17 fell and 10 were
unchanged. Turnover was $169 million.
A2 Milk was the best performer, up 4.1 percent to $10.66. The milk marketer's shares slumped 13 percent last week and a
further 9.3 percent this week after it missed expectations, prompting some analysts to reassess what have been
optimistic assumptions for the company's outlook, and it dropped 2.3 percent yesterday.
"It's continuing its recent extreme volatility, and the reason for that is there appears to have been some relatively
strong shipment data from the Port of Lyttelton where a good deal of their product is shipped from. It's data that quite
a few people subscribe to," said Matt Goodson, managing director at Salt Funds Management. "The previous period was
affected by strikes, so just how much should be read into that, I don't know. The stock is very volatile in both
directions at the moment."
Pushpay Holdings gained 2.2 percent too $4.18, Argosy Property rose 1.9 percent to $1.065, and Kiwi Property Group
advanced 1.8 percent to $1.39.
Fletcher Building was the worst performer, dropping 2.4 percent to $6.47, while Air New Zealand fell 1.6 percent to
Comvita dropped 2.2 percent to $5.80. On Monday, the honey products exporter said it had pulled out of talks with an
unnamed third party looking to take it over as it couldn't reach a deal on price. The stock has dropped 14 percent this
"It's had two bad seasons in a row, the question is what does a normal season look like, and what is it worth based on a
normal season," Goodson said.
Metlifecare dipped 0.2 percent to $5.99. It will build a $180 million retirement village in Auckland’s Beachlands, one
of the ‘greenfield’ sites the industry has been busy sewing up in the past 12 months.
Outside the benchmark index, Metro Performance Glass rose 7.3 percent to 88 cents. Its full-year profit fell 16 percent
to $16.3 million, in line with guidance it gave in April, because of softer growth in New Zealand and capital programme
disruptions in Australia.
Sales rose 10 percent to $268.3 million, including 12 months of trading from Australian Glass Group. Earnings before
interest and tax before significant items were $30.9 million versus $33.9 million in the prior period.
"The result was largely as forecast and the guidance for next year maybe a smidgen below, but I think relief there
wasn't a further earnings miss," Goodson said. "Their balance sheet is not pristine, so perhaps also relief that they
delivered the result and there was no capital raise or anything like that. It's quite operationally and financially
leveraged to the New Zealand housing and construction cycle, which they've said is at something of a plateau at the