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Fletcher's positivity leads NZX higher

NZ NewswireNZ Newswire 17/08/2016 Sophie Boot

New Zealand shares rose on Fletcher Building's positive annual earnings and outlook, while NZX dropped after posting first-half results that included costs of its legal battle with Ralec.

The S&P/NZX 50 Index gained 44.34 points, or 0.6 per cent, to 7,355.01. Within the index, 27 stocks rose, 13 fell and 11 were unchanged. Turnover was $175.3 million.

The index was led higher by Fletcher Building, up 4.9 per cent to $10.16. The building and construction company posted a 71 per cent gain in full-year profit and met its earnings guidance, driven by an improved performance in Australia and gains in its New Zealand distribution, residential and construction divisions.

Rickey Ward, NZ equity manager at JBWere, said the share price had weakened heading into the results as a broker had downgraded their recommendation, but the earnings on Wednesday had seen a recovery.

"The result today indicated the benefits of the last two to three years, of focus on restructuring Fletcher into a cleaner operation with better controls is finally paying dividends," Ward said. "Pleasingly, it signals finally that the downgrade cycle is over."

Metlifecare gained 2.9 per cent to $6.07 and New Zealand Refining advanced 2.8 per cent to $2.56.

Heartland Bank rose 2.8 per cent to $1.48, Warehouse Group gained 2.5 per cent to $2.88, and Freightways was up 2 per cent to $6.81.

NZX was the worst performer, down 1.9 per cent to $1.02.

"I think people are looking at the outlook comments - we're going through a period of a little bit of stagnation in volumes, or liquidity, with limited scope for new IPOs," Ward said.

Kiwi Property Group advanced 1 per cent to $1.575. The country's biggest listed property investor plans to build an $80 million office tower as part of a broader development of the Sylvia Park retail centre in Auckland.

Nuplex Industries, which is in the process of being taken over by Allnex Belgium SA, rose 0.4 per cent to $5.35. The company posted a 19 per cent gain in annual profit as earnings lifted across all its key markets.

Fisher & Paykel Healthcare dropped 1.2 per cent to $10.48 and Trade Me Group fell 1 per cent to $5.14 ahead of its earnings report on Thursday.

Outside the main index, Pumpkin Patch shares spiked 60 per cent to 12 cents.

The childrenswear retailer has maintained its earnings guidance for the year ended July 31, and said it had seen a "pleasing second half performance", though it's still considering further restructuring and is looking for more "flexibility" from its lenders.

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