Sanford hooks index higher
Fletcher drops but not ‘blood on the streets’
New Zealand shares rose, led higher by Sanford and Metro Performance Glass, with Fletcher Building extending its slide after Wednesday’s selloff. The S&P/NZX50 index gained 4.54 points, or 0.06 per cent, to 8063.33. Within the index, 24 stocks rose, 19 fell and seven were unchanged. Turnover was $132.6 million.
Sanford led the index up 4 per cent to $7.88, with Metro Performance Glass rising 3.5 per cent to 88c and ANZ Banking Group gaining 2.3 per cent to $30.28.
The worst performer was Genesis Energy, down 1.7 per cent to $2.35, with Fonterra Shareholders Fund dropping 1.6 per cent to $6.01.
Fletcher Building fell 1.3 per cent to $6.96. The stock dropped 9.3 per cent on Wednesday after the company took a further $486 million provision for project losses at its B+I unit and said 14 of the unit’s 73 projects, worth $2.3 billion, are loss-making or “on watch”.
The stock had fallen as far as $6.91 in intraday trading, but recovered somewhat by the close. It’s now at a two-month low.
“It is certainly not blood on the streets like some had predicted,” said Grant Davies, investment adviser at
Hamilt on Hindin Greene. “We do also need to take into account that the NZX 50 was down a couple of days while Fletcher Building was in a halt, so it is catching up.”
“What they have been saying has given the market confidence — they’re just focusing on getting the existing projects out of the way and investors are looking at the parts of the business that are a bit more attractive — the building materials and distribution network, those are the highly profitable parts of the business,” Davies said. “The last two years have been bad, but even the year before wasn’t a stellar performance from Building + Interiors.”
Outside the benchmark index, Skellerup Holdings rose 5 per cent to $1.89. The shares jumped to a record $1.95 on intraday trading after the rubber goods manufacturer lifted first-half profit 31 per cent thanks to a “standout” performance from its industrial unit which boosted earnings 40 per cent.
Profit rose to $11.7m, or 6.06 cents per share, in the six months ended December 31, 2017, from $8.9m, or 4.63c, in the year-earlier period, the Auckland-based company said.
The company forecast full-year profit of between $24.5m to $26 million, up from $22.1m last year.
Carpet maker Cavalier Corp gained 7.1 per cent to 45c. It reported an improved first-half net profit on better margins, after restructuring the business to reduce costs.
Net profit rose to $1m, or 1.5 cents per share, in the six months ended December 31, from $31,000 in the prior period.
Revenue fell to $75.3m from $84.3m, reflecting reduced carpet sales in the first half due to market conditions as well as the materially lower wool prices which impacted the revenue of its wool buying business Elco Direct.
On the NXT market, QEX Logistics shares jumped 58 per cent to 39.5c, from their listing price of 25c, on its debut on the small-cap NXT market in the first new listing of 2018.
The NXT market is most likely consigned to the dustbin if NZX goes ahead with plans to merge its three equity bourses.
Fishing company Sanford led the index up 4 per cent to $7.88.