Market close: Fisher and Paykel Healthcare, Mercury boost sharemarket higher on improved earnings

Photo / File

The promise of improved earnings from leading stocks gave the New Zealand sharemarket a boost, closing the week more than two per cent ahead.

The S&P/NZX 50 Index climbed a further 221.24 points or 1.69 per cent to 13,333.43 after reaching an intraday high of 13,375.68. The index started the week at 13,024.69. There were 71 gainers and 75 decliners on volume of 49.75 million share transactions worth $213.18 million.

Market heavyweights Fisher and Paykel Healthcare, climbing more than 5 per cent, and Mercury Energy both indicated they will book improved earnings for the present financial year, and along with Contact and Meridian they drove the market forward. Most of the listed companies will deliver their latest results next month.

Greg Smith, head of research for Fat Prophets, said the market had a good day and the message was all about optimism.

"Under the Biden administration, we are going back to some degree of normalcy and more moderate politicking – he's coming out with an economic stimulus and a Covid plan, which was previously non-existent.

"Covid is still going to be an issue for much of this year and this was reflected in Fisher and Paykel's strong update. There is still demand for Fisher and Paykel products - with the roll-out of the vaccine, people thought the company wouldn't be in such a fertile environment, but the roll-out will take time," said Smith.

Fisher and Paykel Healthcare surged $1.84 or 5.53 per cent to $35.10 on heavy trade worth $46.49m after reporting a 73 per cent rise in operating revenue for the nine months ended December. Its share price reached a high of $36.21 during the day's trading.

Fisher and Paykel said revenue and net profit for the 2021 financial year will be higher than earlier forecast. For the nine month period, hospital respiratory products sales grew 113 per cent compared with the previous corresponding period and Homecare sleep apnea products were up 6 per cent.

Mercury revised its full-year operating earnings (ebitdaf) forecast to $535m, from $505, and its share price rose 33c or 4.73 per cent to $7.30. Mercury's upgrade was based on an expected 200 GWh increase in hydro generation to 3900 GWh, matched with strong trading performance.

Contact Energy rose 36c or 4.08 per cent to $9.19; Meridian gained 40c or 5.21 per cent to 8.08; Trustpower climbed 19c or 4.11 per cent to $8.70; and Genesis was up 5c to $3.85. Smith said there is a strong investor appetite for the gentailers with their good dividend yields.

Other movers were Chorus, up 21c or 2.59 per cent to $8.31; Ryman Healthcare gaining 25c to $15.71; Mainfreight up $1.30 or 1.93 per cent to $68.60; and Infratil increasing 8c to $7.38. NZME gained 3c or 4.11 per cent to 76c.

Auckland International Airport fell 14c or 1.87 per cent to $7.36; wine exporter Delegat Group was down 25c or 1.64 per cent to $15; and Scott Technology was down 7c or 2.95 per cent to $2.30.

Retirement village operator Oceania Healthcare slipped 2c to $1.48 after reporting a 67 per cent increase in net profit to $24.78m, from 14.9m, for the six months ending November on revenue of $105.03, up 7 per cent. Oceania's profit was boosted by an increase in the valuation of its properties, and it is paying a 1.3 interim dividend on February 24.

Oceania said sales volumes were 44 per cent ahead of the previous corresponding period and it was on track to complete 217 new units before the end of March. Its total assets were $1.673.6 billion, up 11.8 per cent. Fellow aged care operator Radius Residential Care rose 5c or 4.81 per cent to $1.09.