Market close: Skellerup shining light as sharemarket drifts lower

The S&P/NZX 50 Index traded in a narrow range, following the trend on Wall Street and the ASX

Skellerup Holdings, a quiet performer with more than 100 years of business experience, was the shining light as a cautious New Zealand sharemarket drifted downwards.

The S&P/NZX 50 Index traded in a narrow range, closing down 40.37 points or 0.32 per cent to 12,633.60. This followed the trend on Wall Street and the Australian ASX.

There 63 gainers and 71 decliners on moderate volume of 50.65 million share transactions worth $145.69m.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the local market was facing some headwinds.

"We are into the reporting season now and so far there are no big shocks. The results have been as expected – companies who are performing and others who have large writedowns.

"Inflation is forecast to increase slightly, wholesale interest rates are ticking up, and we've seen a lot of profit-taking in Contact and Meridian in an arm wrestle between the passive and active investment funds," said Sullivan.

Skellerup Holdings, selling dairy rubberware, roofing, plumbing and marine foam decking products globally, provided the highlight of the day, recording a record net profit of $19.46m, up 61 per cent, for the six months ending December. Skellerup breezed through the $4 mark, closing at $4.15 – up 10c or 2.47 per cent.

Skellerup's revenue grew 11 per cent to $136.58m compared with the previous corresponding period, operating earnings (ebit) climbed 53 per cent $27.55m, and it is paying an increased interim dividend of 6.5c a share on March 18.

Sullivan said Skellerup is a tier two stock and doesn't get classed as a core portfolio holding. "The company has been performing well of late and the shareholders will be pleased with its performance."

Auckland International Airport described the impact of the Covid pandemic as unprecedented after suffering major declines – as expected – for the six months ending December, and its share price fell 7c to $6.90.

The airport's revenue fell 65 per cent to $131.5m compared with the previous corresponding period, operating earnings (ebitdafi) was down 68.4 per cent to $88.2m, and net profit slumped 80.9 per cent to $28.1m. Passenger movements crumbled 73.4 per cent to 2.8m. Auckland airport is expecting to make a net loss of $35m-$55m for the 2021 financial year.

Sullivan said it was well signalled that Auckland airport's earnings would slide. The company raised $1.2 billion 10 months ago and it has plenty of room in its balance sheet to keep plugging on.

SkyCity Entertainment was also badly affected y Covid-19, with its revenue falling 37.7 per cent to $449.9m and profit down 76.1 per cent to $78.41m. Like Auckland airport, SkyCity is not paying an interim dividend and its share price edged ahead 1c to $2.88.

Air New Zealand fell 5c or 3.13 per cent to $1.55; Chorus shed 17c or 2.06 per cent to $8.10; Summerset Group Holdings was down 10c to $12.92; and Infratil declined 7c to $7.41.

The dual-listed banks were two of the day's biggest movers after reporting solid first quarter results – Westpac Banking Corporation was up 75c or 2.94 per cent to $NZ26.27, and ANZ Banking Group climbed 83c or 2.99 per cent to $28.63 after reporting a profit of $A1.62 billion ($NZ1.74b) for the three months ending December.

Sullivan said most of the people who took loan diversions when the Covid pandemic broke out are now paying them back, the banks' mortgage books are looking resilient, and they have strong tier one capital ratios.

With the energy stocks having a well-earned quiet day, Fisher and Paykel Healthcare gained 15c to $32.40; Freightways climbed 24c or 2.21 per cent to $11.10; Ebos Group was up 19c to $29.30; Port of Tauranga increased 11c to $7.54; and Comvita picked up 5c to $3.25.

Hallenstein Glasson Holdings rose 10c to $7.65 after reporting its sales for the six months ending February 1 increased 13.6 per cent to $182m compared to the previous corresponding period. Net profit is expected to be $19.5m-$20m compared with $15.4m.

Fellow retailers Briscoe Group was up 6c to $5.71, and The Warehouse Group increased 5c to $3.25; while fast food operator Restaurant Brands was down 8c $11.95.TIL Logistics increased 7c or 6.86 per cent to $1.09, and Rakon gained 6c or 6.98 per cent to 92c.

In a rare move, Freight forwarding company QEX Logistics was suspended from trading after three of its directors suddenly resigned, citing differences with chief executive and majority shareholder Ronnie Xue. It meant QEX no longer complied with the NZX listing requirements relating to board composition. Its last price was 28.5c.