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MARKET CLOSE NZ shares mixed as Warehouse, F and P Healthcare fall, Air NZ gains

Wed, 11 Jul 2018

New Zealand shares were mixed, leaving the NZX 50 Index little changed, as Warehouse Group led decliners after warning of a margin squeeze at its Red Shed stores, Fisher & Paykel Healthcare fell after posting its results and Air New Zealand rebounded from a post-selldown slump.

The NZX 50 fell 0.364 points, or 0.01 percent, to 4818.003. Within the index, 17 stocks fell, 26 gained and seven were unchanged. Turnover of $160 million included $25 million of Air NZ.

Warehouse, the biggest retailer on the bourse, fell 4.7 percent to $3.68 after saying shareholders at their annual meeting that it expects lower first-half earnings as margins at its flagship Red Sheds come under pressure and it spends more on online services.

"They are getting some sales growth but perhaps at the cost of margins," said Shane Solly, equities manager at Mint Asset management.

F&P Healthcare fell 1.3 percent to $3.67 even after the company posted a 34 percent gain in first-half profit to a record $44.5 million and forecast annual earnings of $90 million to $95 million. It trimmed its prediction for operating revenue to a range of $610 million to $625 million from between $625 million and $645 million, citing a stronger exchange rate.

"The expectation was for healthy numbers - maybe they were not quite enough," Solly said. The company's margins "still need to be kept an eye on."

Among other companies that have built high expectations with investors, Ryman Healthcare fell 3.1 percent to $7.55 after reporting record first-half earnings yesterday and affirming it was on track for full-year underlying earnings growth of 15 percent.

Air New Zealand was the biggest gainer on the NZX 50, rising 4.2 percent to $1.60 after a two day slump that followed the government's selldown of 20 percent of the stock. The selldown was criticised for its allocations, which left some investors without the size of holdings they wanted.

"Some of that loose holding is clearing," Solly said.

Among other companies that the government sold down its holding this year, MightyRiverPower rose 1.2 percent to $2.145 and Meridian Energy was unchanged at $1.

Fletcher Building fell 0.9 percent to $9.33 while Telecom gained 0.2 percent to $2.30. Chorus, which has been punished since withdrawing its dividend guidance, gained 2.7 percent to $1.88.

Xero climbed 1.9 percent to $35.45.


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MARKET CLOSE NZ shares mixed as Warehouse, F and P Healthcare fall, Air NZ gains