Shares go up on a2 Milk rebound
New Zealand shares gained as a2 Milk Co rebounded from recent selling, while Fletcher Building and Comvita fell. The S&P/NZX 50 index rose 37.54 points, or 0.4 per cent, to 8590.77. Within the index, 23 stocks rose, 17 fell and 10 were unchanged. Turnover was $169 million.
A2 Milk was the best performer, up 4.1 per cent to $10.66. The milk marketer’s shares slumped 13 per cent last week and a further 9.3 per cent this week after it missed expectations, prompting analysts to reassess what have been optimistic assumptions for the company’s outlook, and it dropped 2.3 per cent on Wednesday.
“It’s continuing its recent extreme volatility, and the reason for that is there appears to have been some relatively strong shipment data from the Port of Lyttelton where a good deal of its product is shipped from. It’s data that quite a few people subscribe to,” said Matt Goodson, managing director at Salt Funds Management. “The previous period was affected by strikes, so just how much should be read into that, I don’t know. The stock is very volatile in both directions at the moment.”
Pushpay Holdings gained 2.2 per cent to $4.18, Argosy Property rose 1.9 per cent to $1.065, and Kiwi Property Group advanced 1.8 per cent to $1.39. Fletcher Building was the worst performer, dropping 2.4 per cent to $6.47, while Air New Zealand fell 1.6 per cent to $3.30.
Comvita dropped 2.2 per cent to $5.80. On Monday, the honey products exporter said it had pulled out of talks with an unnamed third party looking to take it over as it couldn’t reach a deal on price. The stock has dropped 14 per cent this week.
Metlifecare dipped 0.2 per cent to $5.99. It will build a $180 million retirement village in Auckland’s Beachlands, one of the “greenfield” sites the industry has been busy sewing up in the past 12 months.
Outside the benchmark index, Metro Performance Glass rose 7.3 per cent to 88c. Its full-year profit fell 16 per cent to $16.3m, in line with guidance it gave in April, because of softer growth in New Zealand and capital programme disruptions in Australia. Sales rose 10 per cent to $268.3m, including 12 months of trading from Australian Glass Group. Earnings before interest and tax before significant items were $30.9m versus $33.9m in the prior period.
“The result was largely as forecast and the guidance for next year maybe a smidgen below, but I think there’s relief there wasn’t a further earnings miss,” Goodson said. “Its balance sheet is not pristine, so perhaps also relief that it delivered the result and there was no capital raise or anything like that. It’s quite operationally and financially leveraged to the New Zealand housing and construction cycle, which it has said is at something of a plateau at the moment.”
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