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Shares rise but Comvita not so sweet

NZ Newswire logoNZ Newswire 21/02/2017 Sophie Boot

New Zealand shares rose on Tuesday as Scales and Mercury gained and Comvita dropped after its earnings report.

The S&P/NZX 50 Index rose 16.19 points, or 0.2 per cent, to 7,115.69. Within the index, 23 stocks rose, 20 fell and seven were unchanged. Turnover was $132.5 million.

Scales was the best performer, up 3.7 per cent to $3.63, with Sky Television rising 2.3 per cent to $4.47 and Stride Property gaining 1.7 per cent to $1.81.

Mercury advanced 1 per cent to $3.05. The electricity generator and distributor increased first-half profit 53 per cent to $113 million, bolstered by favourable North Island hydro conditions.

Metro Performance Glass was the worst performer, down 2.7 per cent to $1.45, and Chorus declined 1.7 per cent to $4.

Comvita dropped 2.2 per cent to $6.75. The manuka honey company turned to a $7.1 million loss in the first half of its financial year after Chinese authorities cracked down on people selling its products through informal trading channels.

The shares have lost almost a third of their value in the past six months after it warned earnings would be impacted by a weaker honey harvest and slower sales due to a clamp down on China's informal trading channels.

First-half revenue fell 37 per cent to $57.7 million, but it expects sales to rebound in the second half of the year due to growth in markets outside of China, and new initiatives and innovations.

"It's fair to say it was a bit soft, and you can see that in the share market reaction," said Oyvinn Rimer, director and research analyst at Harbour Asset Management. "They've had a few reports in a row that have been disappointing, so there's probably not huge investor confidence that they're going to return to former glory as quickly as they say."

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