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Orion Health in decline as price plummets

NZ Newswire logoNZ Newswire 7/12/2016 Sophie Boot

New Zealand shares declined as Orion Health Group extended its slide following its first-half results, while Tower rose.

The S&P/NZX 50 Index dropped 20.59 points, or 0.3 per cent, to 6,889.77. Within the index, 23 stocks fell, 21 gained and seven were unchanged. Turnover was $165.4 million.

Orion Health Group led the index lower, down 5.7 per cent to $1.65. The stock plummeted 19 per cent when it reported its first-half results on Monday last week, and is down 34 per cent since then.

The health software developer narrowed its first-half loss to $18m and said it would make a profit in 2018, while sales rose to $104.2m from $101.7m.

"It's a continuation from the slide that started with its results at the end of November," said Robert Garden, investment adviser at Craigs Investment Partners.

"Obviously the concern around it is the cash balance they've got and the amount of cash they're burning through at the moment."

Summerset Group dropped 4 per cent to $4.60, Scales Corp fell 2.6 per cent to $3.40 and Trustpower declined 1.8 per cent to $4.36.

Units in Fonterra Shareholders Fund dipped 0.5 per cent to $5.93. Fonterra Cooperative Group is expected to lift its farmgate milk price payout to farmers after a further gain in global dairy auction prices overnight.

Tower was the best performer, up 4.1 per cent to 77 cents.

The stock has rise 4.8 per cent since Nov. 29, when the insurer said it will separate its liabilities and receivables from the Canterbury earthquakes into a separate 'bad bank' structure and "aggressively pursue" recoveries from the EQC and reinsurer Peak Re that amount to about $101m.

Sky TV gained 2 per cent to $4.67, while Vital Healthcare Property Trust rose 1.3 per cent to $2.015.

On the Unlisted market, Zespri Group was unchanged at $3.20. The kiwifruit exporter plans to start construction next year on a $42.8m head office to create a hub for the expanding kiwifruit industry.

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