MARKET CLOSE: NZ shares gain as market cheers Fletcher plans, Sky TV, A2, Auckland Airport rise
By Jonathan Underhill
June 21 (BusinessDesk) - New Zealand shares rallied, pushing the S/NZX 50 Index to a record after Fletcher Building detailed its five-year strategy and affirmed guidance. Sky Network
Television, A2 Milk, Auckland International Airport and Fisher & Paykel Healthcare rose.
The S/NZX 50 Index rose 92.99 points, or 1 percent, to 8,998.78. Within the index, 22 stocks rose, 19 fell and nine were
unchanged. Turnover was $123 million.
Fletcher rose 4.2 percent to $6.88 after chief executive Ross Taylor set out his five-year strategy to refocus on core
businesses, stabilise the construction division, expand in Australia and exit non-core operations. Investors were
cheered by the lack of any further provisions against its Building + Interiors unit, with guidance for group full-year
earnings before interest and tax, excluding B+I and significant items reiterated at $680 million to $720 million and B+I
ebit's loss affirmed at $660 million.
"People liked the fact that the problem child (B+I) didn't speak up again -there were no more provisions for B+I," said
David Price, a broker at Forsyth Barr. Fletcher's news "has been well received", he said.
Sky TV rose 3.9 percent to $2.42, recouping ground lost yesterday with no company-specific news, Price said. A general
lack of liquidity in the market is accentuating any moves and many investors are holding more cash than usual because of
perceptions stocks have risen so much they have stretched their valuations.
"New Zealand growth stocks, in general, are about 20 percent expensive on a PE basis," he said. "It is hard to find
value in the leaders."
Auckland Airport gained 2.7 percent to $6.90 although Price says it hasn't been driven by fundamentals and investors who
bought in around 20 cents lower were selling again.
A2 Milk, one of the standout performers on the bourse with a 20 percent gain in the past 12 months, rose 3.5 percent to
$12.15 today. Production partner Synlait Milk gained 2.5 percent to $11.01.
Summerset Group led gains among retirement village operators, rising 2.4 percent to $7.69 and Ryman Healthcare gained
0.8 percent to $12.04. F Healthcare rose 1.3 percent to $15.20
Pushpay Holdings gained 2.2 percent to $4.27, extending yesterday's gains after the mobile payment app company completed
a $100 million bookbuild this week, letting executive director Eliot Crowther exit the firm he co-founded. The bookbuild
was oversubscribed, with bids subject to scaling, and got offers from 19 institutional investors across New Zealand,
Australia and the US, Pushpay said.
Fonterra Shareholders’ Fund units rose 0.4 percent to $5.78 after Fonterra Cooperative Group said it was satisfied with
steps taken by Chinese partner Beingmate Child & Baby Food in addressing labelling issues highlighted by Chinese authorities.
Mainfreight slipped 0.1 percent to $27.97 after managing director Don Braid told investors there will be a short-term
earnings hit as it rolls out new sites over the next two years. The global transport and logistics firm is considering
expanding into Japan, the Middle East and Scandinavia.
Gentrack fell 0.6 percent to $7.25 after the utilities software firm said it will buy UK-based Evolve Analytics for 23
million British pounds. The deal will be funded through bank debt, but Gentrack plans to raise new capital to pay down
that debt.
GeoOp fell 2.9 percent to 16.5 cents after shareholders approved a $1.4 million tranche of a private placement and share
issues to the former and current chief executives.
NZME slipped 1.2 percent to 84 cents after the media company told shareholders the pace of cost-cutting will slow this
year, and said it anticipated operating costs of some $6 million in 2018 from its investment in new platforms. The
company appointed former MediaWorks executive Sussan Turner to its board today.
(BusinessDesk)