Strong Summerset result gives index a boost

New Zealand shares rose as Summerset Group beat its full-year guidance and revealed a big uplift in net tangible assets, stoking optimism Metlifecare will show a similar improvement when it reports next week.

Comvita fell, saying it expected a belowaverage honey season for 2018.

The S&P/NZX 50 index rose 34.84 points, or 0.4 per cent, to 8301.72. Within the index, 24 stocks gained, 17 fell, and nine were unchanged. Turnover was $171 million.

This reporting season is about half-way through and dominated sentiment yesterday. James Lindsay, a senior portfolio manager at Nikko Asset Management, said the reporting season to date had produced “some pretty reasonable numbers” suggesting NZ Inc was in good heart.

Summerset rose 4.3 per cent to $6.06 after posting a 44 per cent gain in full-year earnings, ahead of guidance, while net tangible assets jumped 39 per cent. Metlifecare, which reports its first-half result on Monday, rose 2.5 per cent to $6.25.

Summerset “was quite an impressive result”, said Lindsay. The market was speculating that “such a substantial uplift [in NTA]” for Summerset may be a signal for the whole sector.

Ryman Healthcare rose 0.8 per cent to $10.68.

Comvita fell 2.7 per cent to $8.15. The honey products company said yesterday that it had a “positive start to the 2018 honey season but a poor finish”. It returned to profit in the first half at $3.7m and reiterated its full-year forecast despite bad weather.

A2 Milk, which has soared this week, fell 1.9 per cent to $12.65.

Port of Tauranga rose 1.8 per cent to $5.08 after raising its full-year earnings guidance on a 13 per cent gain in first-half profit. Lindsay says the port company is trading at about 39 times forward earnings, based on consensus forecasts, which implied a much sturdier rate of earnings growth than it achieved in the first half.

Among other companies, NZX fell 1.9 per cent to $1.06. SkyCity Entertainment Group gained 3.4 per cent to $4 on solid volumes. Scales Corp rose 2.7 per cent to $4.57 and Fisher & Paykel Healthcare gained 2.7 per cent to $13.30.

Delegat Group rose 2.4 per cent to $7.80 after New Zealand’s largest listed winemaker lifted operating profit 9 per cent in the first half.

Steel & Tube rose 0.5 per cent to $2.07. The steel building products company posted a 64 per cent decline in first-half profit after writing down the value of inventory.

Pyne Gould Corp was unchanged at 26.5c after reporting that it more than tripled first-half profit as the investment firm settled litigation with Australian businessman John Grills’ Wilaci unit.