Market close: Shares edge to new five-year high, Sky TV, Tower lead

New Zealand shares edged up to a new five-year high as Sky Network Television surprised investors with a special dividend and Tower said it would return capital to shareholders after the sale of its medical insurance business.

The NZX 50 Index rose 4.61 points, or 0.1%, to 4016.77, the highest since the start of January 2008. Within the index, 25 stocks rose, 18 fell and seven were unchanged.

Turnover was $142 million, with big crossings of Telecom and Sky TV.

Sky TV, the nation's main pay-TV company, rose about 3% to $5.22. The Auckland-based company will pay a special dividend of 32 cents per share with a record date on December 13 to distribute tax credits.

Last year Sky TV paid a special dividend of 25 cents per share.

Sky TV's special dividend "came out of the blue somewhat and shareholders will welcome the decision", says Grant Williamson, a director at brokerage Hamilton Hindin Greene.

Given the market's strong gains recently, a number of shares are now "pretty fair value" and will need to show more earnings growth before they are rerated further.

Tower, the insurer 34% owned by Guinness Peat Group, posted a 67% jump in full-year profit and said it will return $120 million to shareholders after the sale of medical insurance business to Australia's nib.

It was "a very good result, unaffected by any major claims and with proceeds from the sale and some cash from their balance sheet returned to shareholders", Mr Williamson says.

Guinness Peat, the investment company that is winding down its portfolio, rose 0.9% to 59 cents.

Methven, the tapware maker, rose 5.2% to $1.42 after reporting a worse-than-expected 27% drop in first-half profit on its unprofitable British operation.

It still managed to declare a 4.5 cent interim dividend.

Pyne Gould Corp fell 15% to 23 cents, and earlier plumbed a record low 22 cents, after chairman Bryan chairman Mogridge told shareholders yesterday the company will not pay dividends and the board is "seriously considering the domicile of the company," which is unlikely to be New Zealand.

Argosy Property, whose shareholders agreed to corporatise the company after buying out its ANZ Bank-owned manager last year, rose 0.5% to 93 cents after lifting first-half earnings 29% as it reaped the benefits of a cheaper cost structure from bringing management inhouse.

Fisher & Paykel Healthcare was the biggest decliner on the NZX 50, falling 3.1% to $2.51 after shedding its 5.4 cent interim dividend.

Vital Healthcare Property Trust dipped 0.8% to $1.26 after dropping its 1.925 cent interim payment.

Goodman Fielder, the Australasian food manufacturer, rose 6.2% to 86 cents, the biggest percentage gain on the NZX 50.

Fletcher Building, the biggest company on the bourse, fell 0.5% to $7.81. Telecom gained 0.2% to $2.35.

(BusinessDesk)