Market close: Mainfreight, Xero make strong gains

Mainfreighti close up $1 for the day at $58.75. Photo / File

New Zealand's two golden listed stocks, transport and logistics operator Mainfreight and cloud accounting firm Xero - now operating in two different sharemarkets - again made strong gains and set personal records.

While the two growth stocks hogged the limelight, the S&P/NZX 50 Index had a flat trading day, rising 4.98 points or 0.04 per cent to 12,670.62, after reaching a high of 12,733.55. Volume was strong at 60.4 million share transactions worth $208.08 million, and there were 76 gainers and 56 decliners over the whole market.

The very transparent Mainfreight, which provided an unprecedented five trading updates during the Covid crisis, all positive, again broke through the historic $60 barrier with an intraday high of $60.11. But at the close, it settled up $1 for the day at $58.75, a far cry from the low of $25.10 on March 23, just before the national lockdown.

Xero, a born and raised New Zealand company, posted a strong half-year result that saw it moving into clear profit territory and its share price on the S&P/ASX Index at 5.45pm had increased 0.74 per cent to A$123.45 ($130.53).

When Xero delisted from the NZX and moved to the Australian market in February 2018 its share price was around $32 – it has put on close to another $100 in 33 months. Xero, which has provided its accounting system to half of the small businesses in Australia and New Zealand, is now matching this country's biggest company Fisher and Paykel Healthcare ($18.8 billion) in market capitalisation.

Sam Dickie, a senior portfolio manager with Fisher Funds, said Xero's revenue of $409m was up 21 per cent and in line with expectation, but the big increase in net profit from $1.33m to $34.48m wasn't expected and "it can still pull the cost lever." Xero grew its subscribers 19 per cent to 2.45m for the six months ending September.

Meridian reached a new high, after increasing 20c or 3.33 per cent to $6.20 as international investors chase 100 per cent renewable energy stocks like the New Zealand gentailer.

Fisher and Paykel Healthcare had a late fall to $32.70, down 36c on trade worth $32.5m, and Spark was down 13.5c or 2.84 per cent to $4.625.

Pushpay Holdings gained 12c to $7.75; Serko climbed a further 20c or 3.6 per cent to $5.75, Freightways broke through the $9 mark with a 20c or 2.26 per cent rise to $9.05; and a2 Milk was up 22c to $15.65 on trade worth $14.46m.

Dickie said by all accounts a2 Milk fared well in Alibaba's big Singles Day sale this week, and the market is keenly awaiting a trading update at the annual meeting next Wednesday. "That's a critical day for a2," said Dickie.

Synlait, 20 per cent owned by a2 Milk, rose 15c or 2.78 per cent to $5.55, and Sky Network Television which provided an upbeat trading update continued its run, gaining 0.8c or 5 per cent to 16.8c.

The travel stocks which took a big jump with the Pfizer vaccine news on Monday are coming back to earth. Auckland International Airport was down 9c to $7.60 and Air New Zealand fell 4.5c or 2.74 per cent to $1.60. Another Covid-sensitive stock Tourism Holdings was down 5c or 1.91 per cent to $2.57.

Seafood company Sanford confirmed a 46 per cent fall in net profit to $22.43m for the year ending, and its revenue – hit hard by the Covid lockdowns – declined 14 per cent to $468.84m. Sanford is not paying a final dividend and its share price slipped 19c or 3.63 per cent to $5.05.

NZX, which is introducing a new business model, increased 9c or 5.14 per cent to $1.84. It is separating its commercial and regulatory roles, and establishing a new regulatory agency NZ RegCo on December 10, similar to moves by international exchanges.