Market close: Shares rise after Chorus posts maiden profit, Xero falls

BUSINESSDESK: New Zealand shares rose led by Chorus after the network operator posted a maiden profit and flagged a 25.5 cent dividend for its first full year as a stand-alone entity.

Xero fell to a 2½-month low after saying it had no explanation for the slide in its shares.

The NZX 50 Index rose 0.63 points, or 0.01%, to 3623.22. Within the index, 20 shares rose, 16 fell and 14 were unchanged.

Turnover was a larger-than-normal $220.5 million, reflecting the heaviest day of trading in Telecom shares in about 19 months after its results on Friday.

Shares in Chorus jumped 6.7% to $3.37, the highest since early May when the Commerce Commission indicated it wanted a lower regulated average price for some of Chorus' copper network services.

The telecommunications network operator carved out of Telecom last year, reported a profit of $102 million in the seven months ended June 30, on sales of $613 million.

"It is a very good result and the guidance going forward is positive even though it is subject to regulatory conditions" says James Smalley, client adviser at Hamilton Hindin Greene. "Investors are using this positive result to lighten their holding. That explains the two-way holding."

Telecom fell 4% to $2.42. The telecommunications company's full-year earnings and sales lagged behind analysts' expectations on Friday.

Some 52.8 million shares, valued at about $130 million traded today. That amounts to about 2.8% of the stock.

Fletcher Building, New Zealand's largest construction company, gained 1.6% to $6.57. Ryman Healthcare, the country's largest retirement village operator, rose 1.7% to $3.68.

The decline was led by Xero down 5.9% to $4.43. The cloud-based accounting software company says it iss fully in compliance with its disclosure obligations after a price enquiry by the NZX.

"The stock is astronomically high," Mr Smalley says. "One could argue that it has had a fantastic run. It is just a very strong (and extreme) case of profit-taking, hence why the NZX want to check nothing was going on."

Shares in the Warehouse shed 0.7% to $2.87. The biggest retailer on the NZX 50 announced it will get a pretax gain of up to $64 million from sales and the lease back of properties. The stock has fallen about 4%  this year.

NZ Farming Systems Uruguay, the South American dairy farmer controlled by Singapore's Olam International, was unchanged at 57 cents after missing its guidance of two months ago with a bigger annual loss and signalled plans to raise $US135 million to repay a debt to its controlling shareholder.

Kathmandu, the outdoor clothing retailer, shed 1.7% to $1.74. Pumpkin Patch, the children's clothing brand, slipped 0.9% to $1.09.

Infratil was unchanged on $2.09 after Snapper Servicers, which runs the ticketing system used on its buses, said it was not to blame for delays in Auckland's Integrated Fares System which has led to Auckland Transport terminating its contract.

Tourism Holdings, the largest provider of holiday rental vehicles in New Zealand and Australia, rose 1.7% to 59 cents. The Auckland-based company returned to profit after an increase in sales from the Rugby World Cup and the first full-year contribution its Road Bear unit in the US.

Hellaby Holdings, the NZX-listed diversified investment group, was unchanged on $3.20. Profit rose 26% to $19.3 million in the 12 months ended June 30, led by an increase in earnings across its equipment and footwear and automotive divisions.

Bathurst Resources surged 7.8% to 55 cents after it beat off a challenge by environmental groups seeking to have its West Coast coking coal plans overturned on the grounds that burning coal causes climate change.

Bathurst went into a brief trading halt on Friday ahead of the release of the decision from the High Court, upholding a previous Environment Court decision that found climate change considerations cannot be applied in the granting of localised resource consents.