MARKET CLOSE: Shares rise; Heartland, Kathmandu climb

New Zealand shares rose. Heartland NZ advanced after the bank affirmed its profit guidance. Kathmandu Holdings gained on the back of a positive earnings forecast by its would-be acquirer, Briscoe Group.

The S&P/NZX 50 Index rose 21.08 points, or 0.4%, to 5891.85. Within the index, 25 stocks rose, 17 fell and eight were unchanged. Turnover was $102 million.

Heartland climbed 4.4% to $1.19, after the Auckland-based lender said profit may rise as much as 15% in 2016, while affirming its guidance for earnings this year to reach the top of its forecast range at about $48 million, up from $36 million in 2014. In the wake of plunging global dairy prices, which have stretched the balance sheets of some farmers, Heartland sought to assure the market that the dairy sector amounted to about 7.6% of its total lending book.

"The share price has been drifting off in recent times and that was on concerns about exposure they had to the dairy sector," Grant Williamson, director at Hamilton Hindin Greene said. "They came out today and said it was quite minimal and they reaffirmed their guidance for the full year."

Kathmandu advanced 3% to $1.72. The outdoor goods retailer is in the middle of a takeover offer from Briscoe Group, which today said first-half profit rose at least 8.1% to $20 million, outpacing sales growth in the period, as the company continued to fatten its margins. The homewares and sporting good chain operator is offering Kathmandu shareholders five Briscoe shares for every nine Kathmandu shares as well as 20c, in a bid to buy the remaining 80.1% of the stock it doesn't already own.

Outside the benchmark index, Briscoe rose 1.1% to $2.85.

"The two share prices are pretty much trading in tandem at the moment because it is pretty much a scrip takeover," Mr Williamson said. "Kathmandu shareholders will be waiting for the independent target statement and independent valuation before taking any action, and that's due out over the next couple of weeks."

Air New Zealand rose 0.4% to $2.66. Jetstar, the low-cost offshoot of Australian-owned Qantas Airways, will add a sixth domestic route with a new Wellington/Dunedin schedule and bolster its transtasman flights as it looks to win passengers from dominant rival Air NZ.

Spark New Zealand, formerly Telecom Corp, advanced 1.2% to $2.935. Fletcher Building, the building supplies and construction firm, rose 1% to $7.90. Auckland International Airport, the nation's busiest gateway, climbed 1.1% to $5.32.

Outside the benchmark index, Gentrack Group fell 2.3% to $2.15. Chief executive James Docking is to leave next year, ending a decade-long tenure as leader of the transport and utilities software developer. He has been with the company for more than 20 years and oversaw its initial public offering last year.

Turners rose 3.7 percent to 28 cents. The finance company formerly known as Dorchester Pacific has bought Southern Finance for $5 million, giving it greater exposure in the South Island as it continues to expand its loan book. The acquisition is expected to immediately boost annual earnings before interest and tax by $750,000, growing to more than $1 million after the first year.

Millennium & Copthorne Hotels New Zealand was unchanged at $1.40. The hotel operator and property developer boosted first-half profit by 93% to $12 million as it lifted the performance of its hotel operations and its property developments turned profitable in the period.

New Zealand Oil & Gas rose 2% to 50c. The oil explorer says exploration drilling of the Barque prospect in the Canterbury basin, which has the potential to be the nation's biggest-ever hydrocarbon discovery, is expected to start in 2017, subject to securing suitable partners and a drilling rig.

Moa Group fell 1.8% to 28c. The craft beer maker will give workers another chance to get shares in the company, with a long-term employee option scheme issuing up to 1.2 million share options.

(BusinessDesk)