Kathmandu the star performer in mixed trade

New Zealand shares were mixed, as strong sales buoyed Kathmandu while slowing property markets were seen weighing on Ryman Healthcare. Fletcher Building bounced back from a 14-year low.

The S&P/NZX 50 index decreased 1.78 points, or 0.02 per cent, to 8701.38. Within the index, 22 stocks fell, 22 gained and six were unchanged. Turnover was $166 million, of which Fletcher accounted for $70.5 million.

Kathmandu rose 12 per cent to $2.78 on larger volumes than usual. The outdoor equipment chain beat expectations reporting an 8.3 per cent increase in sales from its Kathmandu-branded stores and benefiting from a strong performance from its recently acquired US footwear unit, Oboz.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said investors have largely been pessimistic about the fortunes for retailers due to the threat from online rivals. However, Kathmandu had managed its inventory well and maintained margin to deliver strong sales in the quarter.

“That was a really good result and potentially surprised the market a little bit.”

Ryman slipped 0.2 per cent to $11.48 after reporting a 14 per cent increase in underlying first-half earnings. McIntyre said the results noted a weaker building rate in coming years, with concerns about slowing property markets in Auckland and Melbourne. Chief executive Gordon McLeod downplayed the impact of slowing property markets, pointing to its experience during the global financial crisis downturn.

Rival Metlifecare fell 1.8 per cent to $5.52 on light volumes, the biggest fall on the day.

Fletcher gained 2 per cent to $4.69 on volumes of 15.3 million shares, compared with its 1.5 million 90-day average.

McIntyre said building companies have been re-rated, which raised questions about how much Fletcher might get for its international Formica business which is up for sale. The lack of a defined dividend policy at this week’s annual meeting compounded the grim outlook for the Australian building market, he said.

Other companies to have come under selling pressure in the past three months gained yesterday. Pushpay Holdings rose 2.7 per cent to $3.07, Heartland Group increased 2.1 per cent to $1.47 and Synlait Milk advanced 1.8 per cent to $8.70. A2 Milk

increased 0.3 per cent to $10.53 on volumes of 3.3 million, while Spark New Zealand declined 1.6 per cent to $4.075 on average volume of 2.8 million.

Vital Healthcare Property Trust

decreased 0.5 per cent to $2.11 after manager NorthWest said it won’t exercise rights to terminate directors or raise its management fee until it reviews the fees in the first quarter of next year.