Energy generator will return cash to shareholders rather than invest overseas in geothermal schemes
New Zealand shares rose after Contact Energy said it would return surplus cash to shareholders. Fisher & Paykel Healthcare and Metro Performance Glass gained ahead of reporting their earnings.
The NZX 50 Index rose 18.96 points, or 0.3 per cent, to 5794.98. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover was $111 million. Contact jumped 11 per cent to $6.18 after the energy generator and retailer said it had ditched plans for now to invest in geothermal schemes overseas and will increase returns to shareholders, including a special dividend of 50c a share, payable on June 23, and a new ordinary dividend payout ratio of 100 per cent of underlying earnings after tax. The stock had dropped as low as $5.50 when Contact first flagged its overseas plans in February.
“Management had let the market down after announcing that they were going to look at offshore geothermal projects with the money they had on the balance sheet,” said Robert Garden, investment adviser at Craigs Investment Partners.
“That had disappointed shareholders and the stock got sold off pretty heavily. They’ve done a 180 and announced a 50c special dividend today. It’s a complete reversal from management, but that has been well received by the market today.”
Nuplex Industries fell 1.3 per cent to $3.71. The company is forecasting a 64 per cent gain in sales in Asia by 2018 as its expansion of plants in China, Vietnam, Thailand and Indonesia bears fruit.
The Auckland-based company expects sales from Asia of about US$400 million by the end of 2018, from US$243 million in 2014, according to a presentation for an investor day in Auckland.
Metro Performance Glass rose 1.7 per cent to $1.85. F&P Healthcare, advanced 1.4 per cent to $6.39.
Both stocks are due to report earnings this week.
Spark advanced 0.7 per cent to $2.75.
Fletcher Building cent to $8.56.
Outside the benchmark index, Trilogy International rose 7.5 per cent to $1. The skincare products and scented candle maker announced its first dividend, paying 3.66c a share after annual profit more than tripled to $4.5 million, on Australian sales growth and the first earnings from its Ecoya candle brand.
Methven rose 0.9 per cent to $1.17. The tap and shower manufacturer and exporter lifted annual profit by 21 per cent to $5.69 million in line with
gained 0.4 per guidance, after the acquisition of a Chinese manufacturing plant widened margins.
Evolve Education Group advanced 4 per cent to $1.04. The childcare operator that listed in December reported a smaller than forecast annual loss as it settled a series of acquisitions faster than anticipated, driving higher revenue.
The Auckland-based company reported a net loss of $8.1 million in the period May 20, 2014, to March 31, 2015, smaller than the loss of $9.5 million forecast in its November prospectus.
NPT was unchanged at 65c. The listed property investor posted a 16 per cent drop in annual profit to $6.4 million reflecting a bigger uplift in the year-earlier period from a revaluation of properties.