MARKET CLOSE: NZ shares gain

New Zealand shares gained as early earnings reports skewed positive, with Steel & Tube Holdings and Summerset Group gaining on their results.

The S&P/NZX50 Index rose 25.25 points, or 0.3%, to 7388.35. Within the index, 31 shares rose, 17 fell and three were unchanged. Turnover was $109 million.

Steel & Tube Holdings led the index, up 10.5% to $2.42, a ten-month high. First NZ Captial analysts raised their rating on the stock following the steel products maker posting better-than-expected annual earnings and lifting its dividend payment on Friday.

The Lower Hutt-based company reported an underlying profit of $19.4 million in the year ended June 30 on record sales of $516 million as the contribution from new acquisitions and cost savings helped offset weaker prices and margins as well as costs related to "quality issues."

"To be honest I'm a little surprised it's as strong as it is – the market had time to react on Friday, and it did, I guess the market's had time to digest some of the aspects of the result and it's got a little more optimistic," Mark Lister, head of private wealth research at Craigs Investment Partners said. "It wasn't a great result but it's certainly better than what people were expecting, so I think it's a case of Steel & Tube expectations having been quite low going into the result and the market being pleasantly surprised it wasn't anywhere near as bad as they thought."

Summerset Group gained 4.8% to $5.20, an all-time high. The retirement village operator and developer lifted first-half earnings 44% to $24.7 million in the six months ended June 30, beating expectations, and will pay a larger dividend than anticipated after enjoying a record second quarter of unit sales.

"Their result was a very good result. It was expected to be strong but it was even better again," Lister said.

NZ Refining Co gained 4.1% to $2.52, Ebos Group rose 2.7% to $17.67, and Warehouse Group advanced 1.8% to $2.85.

Contact Energy rose 0.2% to $5.27. The electricity and gas provider posted little-changed full-year operating earnings amid signs that electricity demand is starting to grow after a long period of decline and that its investment in technology to gain and retain customers is starting to show returns.

Kathmandu Holdings was the worst performer, down 2% to $1.93.

Genesis Energy dropped 1.8% to $2.22 and Meridian Energy fell 1.2% to $2.865.

Freightways dipped 1.2% to $6.66. The courier company delivered a steady if unspectacular full-year result with both increased revenue and profits driven by increased migration and higher consumer demand, and is predicting incremental growth in the year ahead.

"It was a little softer than people would have liked as well, and the outlook commentary was a little more subdued than people would've liked to see as well," Mr Lister said.

Outside the main index, Pushpay Holdings advanced 5% to $2.52. The mobile payments app developer brought forward its target for reaching $100 million of annualised committed monthly revenue to December 2017 as it narrows its focus to larger customers. Pushpay has traction in the US faith sector, where its services are used by more than 1% of the estimated 314,000 churches with an average 500 attendees each.

(BusinessDesk)