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NZ shares fall as Warehouse earnings weigh

NZ Newswire logoNZ Newswire 9/03/2017 Sophie Boot

NZX signage  in Wellington.  (File photo) © Hagen Hopkins/Getty Images NZX signage in Wellington. (File photo) New Zealand shares dropped as Warehouse Group fell on a slump in first-half earnings and Fletcher Building extended its decline, while Genesis Energy and Restaurant Brands rose.

The S&P/NZX50 Index fell 37.23 points, or 0.5 per cent, to 7,140.99. Within the index, 28 stocks dropped, 14 rose and eight were unchanged. Turnover was $152.1 million.

Warehouse Group fell 2.7 per cent to $2.50. The retailer reported a 76 per cent drop in first-half profit to $13.6 million after it took an impairment charge against its financial services unit, recognised restructuring costs and earned less from its Red Shed department stores.

"It's clearly a bit weaker than what the market was expecting, more at the revenue line than at the bottom line necessarily," said Rickey Ward, NZ equity manager at JB Were.

"It's the confirmation of a very tough consumer sector and a company that has gone backwards a bit, combined with the potential it could be removed from indices - that hasn't helped it on a day that's had negative undertones already."

Fletcher Building dropped 3.4 per cent to $9.20. Last month the company posted a 2 per cent gain in first-half profit that included unexpectedly weak earnings from its construction division, especially given its $2.7 billion backlog of work.

NZX, which gave up rights to a 3 cent dividend, was the worst performer, down 4.5 per cent, or 5 cents, to $1.06.

Genesis Energy was the best performer, up 2.1 per cent to $2.15, while A2 Milk Co rose 2.1 per cent to $2.48.

Restaurant Brands New Zealand gained 0.9 per cent to $5.44. The fast-food retailer lifted fourth quarter sales 37 per cent to $121.6 million, bolstered by gains from its Australian KFC stores.

Outside the benchmark index, NZME dropped 2.4 per cent to 83 cents. Fairfax Media says it's looking for a permanent replacement for New Zealand managing director Simon Tong, who has resigned just days before a Commerce Commission ruling on the proposed merger with NZME.

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