Ebos, Airport boost index to record
Strong half-year results for both impress investors
The S&P/NZX 50 index broke through 12,000 for the first time after Ebos Group and Auckland International Airport reported strong half-year earnings.
The benchmark index increased 83.83 points, or 0.7 per cent, to 12,064.86. Within the index, 27 stocks gained, 15 fell, and eight were unchanged. Turnover was $157.9 million.
Ebos led the market to the new record, rising 3.4 per cent to $24.15 on a higher than usual volume of 371,000 shares.
The pharmaceuticals distributor reported a first-half profit of $81.7m, up from $67m a year earlier, as the impact of winning the Chemist Warehouse Group contract kicked in from July.
It lifted its interim dividend 8.7 per cent to 37.5c per share.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said the result was better than investors had anticipated and impressed them with a strong outlook.
“The group overall is confident of a significant increase in earnings in the current financial year, so that’s got the market very excited,” he said.
Auckland International Airport
rose 3 per cent to $8.60 on a higher than usual volume of 1.3 million shares, after it reported a 2.2 per cent lift in first-half underlying profit and trimmed full-year guidance by $5m due to the Covid-19 virus.
McIntyre said underlying profit after tax of $139.9m — versus $136.9m a year earlier — was a strong result, especially when viewed in the context of lower expectations.
“It gave a bit of flavour around the importance of China to its earnings, but investors grabbed on to the fact that even though earnings had plateaued a little bit, the outlook was still for consistency in earnings,” he said. Precinct Properties New Zealand gained 0.8 per cent to $1.895 on
an above-average volume of 3.9 million shares. The company more than doubled its first-half earnings as it booked a $50m claim against Fletcher Building for delays at Auckland’s Commercial Bay development.
Fletcher rose 3.3 per cent to $5.59 on an above average volume of 4.5 million shares on Wednesday, it reported a first-half profit of $82m, down from $89m. McIntyre said investors were encouraged by a strong outlook for the 2020 financial year, despite reduced earnings in the latest half. Spark New Zealand, which on Wednesday reported a 9.2 per cent lift in first-half profit, rose 1.3 per cent to $4.84 on above average volumes of 3.9 million shares.
Air New Zealand increased 0.7 per cent to $2.73, winning back some of Wednesday’s sell-off following the announcement it would reduce flights to Shanghai due to low passenger numbers.
McIntyre said the airline had a solid domestic business, which makes up a large proportion of earnings, and investors were mindful of the 11 per cent yield that the stock produces. Qantas Airways said yesterday it will reduce flights across Asia — including to New Zealand — due to Covid-19, raising speculation Air New Zealand could pick up some slack.
Among other stocks trading on volumes of more than a million shares, Oceania Healthcare increased 0.8 per cent to $1.24, Meridian Energy fell 0.6 per cent to
$5.645, SkyCity Entertainment Group rose 2.2 per cent to $3.77 and
Kiwi Property Group held at $1.555.