MARKET CLOSE: NZ shares fall; Chorus, A2, Genesis drop, Auckland Airport gains
The S&P/NZX 50 Index declined 24.04 points, or 0.3 percent, to 7367.26.
The S&P/NZX 50 Index declined 24.04 points, or 0.3 percent, to 7367.26.
New Zealand shares fell after Chorus said profit growth stalled and chief executive Mark Ratcliffe would step down next year. A2 Milk and Genesis Energy also declined while Auckland International Airport and Air New Zealand gained.
The S&P/NZX 50 Index declined 24.04 points, or 0.3%, to 7367.26. Within the index 27 stocks fell, 15 rose and nine were unchanged. Turnover was light at $84 million.
Chorus dropped 1.7% to $4.55 after its full-year results, having risen to a record high $4.65 last week. The telecommunications network operator said lower regulated pricing for access to its copper services were to blame for full-year profit stalling, although it sees a resumption of growth in 2017. Mr Ratcliffe, who steered the company through its demerger from Telecom to become CEO in 2011, will step down in the middle of next year.
Some of the stock's decline "might be to do with the CEO stepping down because they were relatively positive on growth going forward," said Grant Williamson, a director at Hamilton Hinden Greene. "There was maybe a bit of profit-taking after the result."
Spark New Zealand, the nation's biggest telecommunications company, fell 2.2% to $3.84.
A2 Milk fell 3.4% to $1.98, leading the index lower. Last week the milk marketer met its June guidance with a return to full-year profit and a 127% jump in revenue that was driven by infant formula sales in Australia and China. Kathmandu, the outdoor clothing chain, declined 2.5% to $1.96 and Skellerup Holdings, the rubber goods maker, fell 2.1% to $1.43.
Genesis Energy fell 2% to $2.175 and Sky Network Television fell 1.9% to $4.73.
The NZX 50 has fallen 1.5% from its record high of August 23 and Williamson said a correction isn't surprising in the wake of earnings season.
"The reporting season has certainly been acceptable but expectations were extremely high," he said. The sell-off isn't likely to herald a major correction "because you keep coming back to the interest rate environment" where low interest rates make the stock market a stand out in terms of yield.
Auckland Airport rose 1.4% to $7.30 after posting a 17% gain in net profit as the nation's busiest gateway benefited from a boom in tourism and inbound migration that's driving passenger growth. It will pay a final dividend of 9c a share, fully imputed, making 17.5c for the year, a 19.9% increase from 2015.
"It's one of the bluest of the blue chips in this market," Williamson said. The fundamentals of the stock "are starting to look quite high" but there's little to suggest any downside, given the growth in Auckland's population and the inbound tourism numbers."
Air New Zealand rose 2.5% to $2.275 as investors were lured to the airline's special dividend of 25c on top of an ordinary final dividend of 10 cents announced on Friday.
Among smaller companies, Intueri Education Group ended the day unchanged at 30c after posting a 43% decline in first-half profit, on a gain in revenue that wasn't enough to offset the benefit of finance and other income in 2015, which wasn't repeated in the latest year.
Wellington Drive Technologies jumped 9.1% to 12c cents after the maker of energy efficient motors for commercial refrigerators said revenue rose 38% in the first half, driven by demand in the US and Canada ahead of the adoption of new regulatory standards next year.
Airwork Holdings was unchanged at $4.50 after the specialist aviation company delivered a 58% boost in full-year profit to $24.6 million following strong earnings growth in its expanded fixed-wing aircraft business.
Veritas Investments, the NZX-listed hospitality company that owns the Mad Butcher franchise, Nosh food markets and the Better Bar Company, was unchanged at 47c after reporting an audited net loss of $4.59 million in the year to the end of June 2016, compared to a profit of $3.33 million a year earlier.
(BusinessDesk)
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