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Orion Health, Tower lead local index lower

NZ Newswire logoNZ Newswire 29/11/2016 Sophie Boot

New Zealand shares were mixed with Orion Health Group and Tower dragging the index lower on their first-half earnings.

The S&P/NZX 50 Index fell 1.22 points, or 0.02 per cent, to 6,901.74. Within the index, 31 stocks gained, 18 fell and two were unchanged. Turnover was $168.5 million.

Tower dropped 2.7 per cent to 71.5 cents. The general insurer posted a wider annual loss of $22.3m as it set aside $25.3m for provisions due to the Canterbury earthquakes, and detailed plans to separate out the claims into a new unit.

Tower's shares are the worst performer on the S&P/NZX50 benchmark index this year as the insurer deals with greater-than-expected new claims related to the Canterbury earthquake in 2010 and 2011, saying that it has received about 300 new claims in the past year worth $22m.

"It's yet again a set of numbers dominated by provisions for Canterbury - separating an entity into RunOff and New Tower, it makes sense but there are plenty more hurdles to run through, and I guess that's why the share price is a bit weaker today," Rickey Ward, NZ equity manager at JB Were said.

Orion Health was the worst performer, down 6.8 per cent to $1.91. The health software developer plunged 19 per cent on Monday following its first-half results, where it 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.

"The result wasn't great, investors don't like surprises and it was a little bit of a surprise," Ward said. "It might be a bit harsh, but people are saying we've had Wynyard - which showed all the signs of being an okay company - is this another Wynyard?"

Summerset Group Holdings fell 1.8 per cent to $4.88, Fisher & Paykel Healthcare Corp dropped 1.7 per cent to $8.19, and Trustpower fell 1.6 per cent to $4.38.

Scales Corp was the best performer on the index, up 3.6 per cent to $3.46. Stride Property gained 2.2 per cent to $1.87 and Tegel Group advanced 2 per cent to $1.50.

Outside the benchmark index, Trilogy International fell 9.1 per cent to $3.28 and Synlait Milk declined 2.1 per cent to $3.25.

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