Kiss-and-tell time looming

Big guns report soon but will any misfire?

Sharemarket investors are preparing for a month of corporate kiss-and-tell and for some, the experience will be less than satisfac- tory.

Most of the market’s big guns have June balance dates, and will report their annual results in August.

They include most of the power generator-retailers, which form the backbone of the market.

Then there are Auckland International Airport, Air New Zealand, SkyCity Entertainment and Tourism Holdings — all companies at the sharp end of the tourism boom.

Some companies have already telegraphed what their results are going to look like.

Fletcher Building

One of the market’s biggest stocks, Fletcher Building, will be closely watched this reporting season.

The company said in March that it expected operating earnings before interest, tax and significant items (ebit) to be between $610m to $650m for the year, compared with a previous ebit guidance range of $720m to $760m.

Fletcher Building said the revised guidance is due to the identification of additional estimated losses and downside risk in the company’s buildings and interiors business unit of the construction division.

In the previous year, Fletcher Building’s ebit came to $719m.

“Following the big hiccups earlier in the year, markets are rightly nervous about whether there is any further bad news to come,” said Craigs Investment Partners’ head of private wealth research, Mark Lister.

“If there is no further negative news to come, the stock could stage a bit of a relief rally after the result,” he said.

The share price dropped on the earnings downgrade but has since stabilised. It closed yesterday at $7.78, which is 4.85 per cent above the recent low of $7.42 from early June. However, it is still well below where it was back in November last year, when it got as high as $10.98.

Positive upgrades

But the market has not been without its positive upgrades.

Tourism Holdings has upgraded its year-end forecast to a net profit of $29.5m. And alternative dairy company A2 Milk expects its group revenue to hit $545m, up $20m on the previous update.

The stock has been a standout performer and has a devout fan club, particularly in Australia, where it is also listed.

A2’s shares last traded at $3.98, and have rallied by 113.3 per cent over the last 12 months.