Market close: Shares mixed as Sky City gains on dividend, Summerset falls

New Zealand shares were mixed today. SkyCity Entertainment Group rose after earnings met estimates and it lifted its dividend, while Summerset Group fell amid speculation its biggest shareholder will trim its stake.

The NZX 50 Index rose 3.27 points, or 0.1 percent, to 4221.39. Within the index, 24 stocks fell, 19 rose and seven were unchanged. Turnover was $125 million, with Fletcher Building, Telecom and SkyCity dominating trade.

SkyCity rose 0.3 percent to $4.01. The casino and hotel group posted a 16 percent decline in first-half earnings as it cycled the Rugby World Cup boost a year earlier. Still, the company kept its full-year guidance broadly intact and lifted its interim dividend to 10 cents a share, reflecting a new policy of paying not less than 20 cents in any full year.

"Investors are pretty happy with the underlying performance," says Grant Williamson, a director at Hamilton Hindin Greene. And they are encouraged by the dividend increase and new policy. "It does not look expensive, given the quality of its assets.

"Investors will be taking one company at a time as they report their results. There's concern some shares have got a little bit ahead of where earnings will be."

Summerset, the retirement village operator, fell 2.7 percent to $2.54. The restraint on majority owner Quadrant on selling its holding expires this month and some investors have speculated the private equity firm will look to sell. The stock has soared 80 percent in the past 12 months.

"There's bound to be a bit of profit taking after a great run up," Mr Williamson says.

Rakon, which makes components for navigation systems and smart phones, tumbled 32 percent to a record low close of 26 cents after cutting its annual earnings guidance for the second time since December, blaming increasing price competition in the smart device market.

The Auckland-based company expects earnings before interest, tax, depreciation and amortisation between $5 million and $7 million in the 12 months ended March 31, down from December's forecast of $8 million to $12 million.

New Zealand Oil & Gas rose 1.6 percent to 96 cents. ASX-listed Raisama Energy has backed out of its 10 percent interest in the Kakapo oil and gas prospect in Taranaki, preferring opportunities in Asia instead.

Westpac Banking Corp climbed 2.2 percent to $35 on the NZX, leading gainers on the benchmark index after Commonwealth Bank of Australia posted record first half earnings, lifting sentiment for lenders.

Kathmandu, the outdoor equipment chain, rose 1.8 percent to $2.26. Among other retailers, Warehouse Group fell 0.9 percent to $3.44, Pumpkin Patch dropped 1.4 percent to $1.37 and Michael Hill International fell 1.6 percent to $1.22.

Fletcher Building, the biggest company on the NZX 50, rose 0.6 percent to $8.94. Telecom declined 1.7 percent to $2.27. Contact Energy fell 0.2 percent to $5.17 after saying it would cut 100 jobs as part of efforts to reduce costs.

(BusinessDesk)