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MARKET CLOSE: NZX 50 climbs to new record, Restaurant Brands gains on guidance

Suze Metherell
Thu, 23 Oct 2014

New Zealand shares rose to a new record close, led by Restaurant Brands New Zealand after the country's biggest fast-food operator boosted its annual earnings guidance. Spark New Zealand pace gains as investors sought defensive stocks with reliable dividends

The NZX 50 Index rose 13.126 points, or 0.2 percent, to 5292.825. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover was $130.7 million.

Restaurant Brands led the benchmark index higher, advancing 4.9 percent to a record close of $3.67. The fast-food operator raised its annual profit forecast to $22 million as it benefits from lower input costs, higher sales and restructuring of stores. It said first-half profit rose 19 percent to $11.5 million as a 9.1 percent gain in revenue outpaced a 6.8 percent increase in the cost of goods sold.

"That result and guidance going forward was better than the market expected, and the KFC side appears to be doing extremely well," said Grant Williamson, director at Hamilton Hindin Greene. Restaurant Brands is "viewed as a defensive, yield stock," and "investors were back chasing yield and the more defensive stocks on the market."

Other companies with reliable dividend returns to gain were Spark, formerly Telecom Corp, which climbed 2.7 percent to $3.04, and general insurer Tower, which increased 0.5 percent to $1.90.

Fletcher Building fell 0.9 percent to $8.51. The country's largest listed company won a contract to build 237 homes on an 11.5-hectare Crown-owned site in Christchurch, including 89 which will be priced below $400,000, Housing Minister Nick Smith said.

Warehouse Group, New Zealand's largest listed retailer, rose 2.3 percent to $3.17. James Pascoe, the retail group owned by David and Anne Norman, has boosted its holding the retailer to 6.3 percent from the 5.15 percent.

"Pascoes upped their stake in the company, which is seen as a sign of confidence in the company," Williamson said.

Port of Tauranga rose 0.4 percent to $16.16. The country's biggest coastal export hub sees annual earnings growth of up to 6.1 percent to between $78 million and $83 million and expects to finish plans to enable big ships to dock at its wharves over the coming year.

Auckland International Airport, the country’s main gateway, was unchanged at $3.81. At its annual general meeting it confirmed it’s likely to deliver an underlying net profit of between $160 million and $170 million this financial year, in line with the guidance it gave in August.

Units in Fonterra Shareholders' Fund fell 0.3 percent to $6.16. Fonterra Cooperative Group, the world's largest dairy exporter, said it is looking at building two new South Island driers. Units in the fund give holders access to the cooperative's dividend stream.

Power companies were mixed after government data showed consumer electricity prices fell 0.2 percent in the third quarter. Contact Energy rose 0.7 percent to $6.17 and TrustPower was unchanged at $7.37, while the three state-controlled electricity generator-retailers declined, with Genesis Energy down 0.7 percent to $2.01, Meridian Energy falling 0.3 percent to $1.675 and MightyRiverPower declining 1.1 percent to $2.79.

Outside the benchmark index, Pyne Gould Corp, the asset management firm controlled by managing director George Kerr, said it has sold its 27 percent stake in Equity Partners Infrastructure Co No 1 after failing to take control of the investment company and oust its board. Trading in Pyne Gould's shares last traded at 38 cents before they were suspended on Oct. 9 by the stock market operator and regulator, after the firm failed to lodge its annual report by the required deadline.


Suze Metherell
Thu, 23 Oct 2014
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MARKET CLOSE: NZX 50 climbs to new record, Restaurant Brands gains on guidance