Market close: shares drop as Fletcher gives off ‘lower-end’ vibe

New Zealand shares fell as Fletcher Building, the biggest company on the NZX 50 Index by market value, left some investors at a Macquarie briefing in Sydney with the impression earnings would be at the low end of guidance.

The NZX 50 fell 30.14 points, or 0.7 percent, to 4544.32. Within the index, 22 stocks rose, 19 fell and nine were unchanged. Turnover of $139 million was boosted by the 6.1 million Fletcher shares that changed hands.

Shares also fell as the Mighty River Power retail offer closed. NZX chief executive Tim Bennett says the MRP float was "critical for the development of New Zealand's financial market It'll bring in the next generation of retail investors".

Fletcher, the building products and construction group, fell 6.5 percent to $8.03. Macquarie hosted a series of New Zealand companies in Sydney this week.

Fletcher kept its guidance unchanged "but those attending did think it would be towards the lower end of that range", says Matt Goodson, portfolio manager at BT Funds Management.

Xero resumed its climb, rising 5.6 percent to $13.20 and valuing the cloud-based accounting company at about $1.5 billion. It is yet to make a profit as it chases sales growth.

Chief executive Rod Drury says profits will emerge if the company let up on its sales push, but growing sales was ultimately the way for the company to get global scale and profits would follow.

Diligent Board Member Services climbed 2.1 percent to $6.95.

Electricity generators and retailers Contact Energy gained 0.2 percent to $5.28 and TrustPower rose 0.7 percent to $7.55, after the offer for rival MRP closed today.

Dual-listed Westpac Banking Group fell 1.3 percent to $40.40 after the group lifted cash earnings 10 percent to $A3.53 billion on a 4 percent gain in revenue to $A9.17 billion and declared an interim dividend of 86 Australian cents a share and a special dividend of 10 cents. The New Zealand unit boosted cash earnings 7 percent to $370 million.

Telecom gained 2.1 percent to $2.62.

Ryman Healthcare fell 0.6 percent from a record high to $6.22. Rival Summerset Group, up 43 percent this year, rose 0.3 percent to $3.21 and Metlifecare rose 0.6 percent to $3.64.

"The retirement sector has turbo-charged leverage to house prices," Mr Goodson says.

NZX, the stock market operator, fell 0.8 percent to $1.33. Sales in the first quarter rose 4.3 percent to $14.3 million, led by gains in securities clearing and market operations, up 23 percent to $1 million and 26 percent to $3.05 million, respectively, the company said today.

Briscoe Group fell 0.8 percent to $2.51. The retailer said today that first-quarter sales rose 5.9 percent, helping offset weaker gross margins caused by increasing competition among retailers and a late start to winter.

Sales rose to $108.6 million in the three months ended April 28, the Auckland-based company says in a statement, with a 5.5 percent lift in homeware and a 6.6 percent gain in sports goods.

(BusinessDesk)