How the sharemarket performed today

Apple company Scales was today's best performer, up 3.7 per cent to $3.63.
Apple company Scales was today's best performer, up 3.7 per cent to $3.63.

New Zealand shares rose 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 Corp was the best performer, up 3.7 per cent to $3.63, with Sky Network Television rising 2.3 per cent to $4.47 and Stride Property gaining 1.7 per cent to $1.81.

Mercury NZ advanced 1 per cent to $3.05.

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

It lifted the full year ebitdaf guidance it gave in November to $500m versus prior guidance of $495m.

Among other elements, the annual guidance assumes 4,250GWh of hydro production, flat operating expenditure on the year and the inclusion of $5m from the divestment of carbon credits.

"It was pretty much in line with expectations, there were a couple of small one-offs with maintenance capex being lighter and they sold some of their carbon credits so had cashback and gain on sale, so the quality wasn't quite as good as the headline numbers," said James Lindsay, senior portfolio manager at Nikko Asset Management.

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 $7.1m 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 $57.7m, 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."

"They've run into a number of different headwinds they say, one is problems with the distribution channel to China, some of the grey market channels have experienced issues, but the more recent issue is the poor harvest this year - it looks quite soft. They are diversifying the business, and I think the olive leaf extract story is much longer term before it replaces manuka honey as a key product," Rimer said.

Heartland Bank was unchanged at $1.57.

The lender increased first-half profit 14 per cent to $29.1m as its loan book grew at the same time as it benefited from cheaper funding costs, with rural and business loans expanding at a faster pace than household lending.

Tourism Holdings rose 0.3 per cent to $3.89.

The campervan rental company lifted first-half profit 38 per cent to $11.3m with strong tourist demand in New Zealand and Australia, and said it will at least deliver its forecast annual profit of $27m.

Outside the benchmark index, PGG Wrightson gained 1.9 per cent to 55 cents. Its profit growth stalled at $16m in the first half, which the rural services company blamed on low prices for dairy and wool and reduced production of red meat which had made farmers more cautious about spending.

Sales declined to $608m from $623m.

Colonial Motor Co was unchanged at $7.60. It reported a 5.2 per cent drop in first half profit to $10.5m and while it was guardedly positive about the immediate future it signaled several risks. Trading revenue dipped 0.3 per cent to $437.46m.

Energy Mad was unchanged at 2.9 cents. SuperLife, the funds management business owned by NZX, has swapped 2.25m convertible notes for just under 70m shares in Energy Mad, giving it 71.4 per cent of the energy efficient lightbulb marketer.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf04 at 28 May 2017 20:54:13 Processing Time: 598ms