San­ford hooks in­dex higher

Fletcher drops but not ‘blood on the streets’

The New Zealand Herald - - MARKETS -

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.

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