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The New Zealand sharemarket perked up towards the end of a sluggish week, and Synlait Milk added some intrigue after going into a trading halt.
The S&P/NZX 50 Index found some strength late in the afternoon and closed at 11,927.5, up 47.82 points or 0.4 per cent. The index gained 0.4 per cent for the week, and is now 4.26 per cent ahead for the year.
But trading during the school holidays continued to be light, with 28.55 million shares worth $96.69 million changing hands. There were 55 gainers and 65 decliners on the main board.
Mark Lister, investment director with Craigs Investment Partners, said the market was still quiet and meandering along.
“There hasn’t been a lot of reaction to the fall in annual inflation. It is a step in the right direction, but 6.7 per cent is still higher than anyone would like,” he said.
“The market is reluctant to get ahead of itself because there is a final interest rate hike to come – so that doesn’t turn the dial dramatically. And there’s some nervousness about whether we will see the economy slow down later this year as people start fixing their mortgages at higher rates,” Lister said.
Synlait Milk went into a trading halt after telling the market it needs time to properly consider new information, which may require a revision to its previously-issued earnings guidance. Synlait last traded at $2.14, and its share price has fallen 37 per cent over the past year.
In its last guidance on March 27, Synlait said it expected a net profit of $15m-$25m, well below market expectation. Synlait’s first-half net profit fell 83 per cent to $4.8m, driven by reduced forecast demand for infant formula, including from its biggest customer, a2 Milk, which was down 11c or 1.72 per cent to $6.28.
Lister said the fact that Synlait had to go into a trading halt did not point to fantastic news – “we will watch with interest”.
Fisher and Paykel Healthcare was up 29c to $27.04; Ebos Group increased $1.03 or 2.32 per cent to $45.50; Mainfreight added $1.28 or 1.81 per cent to $72; Infratil gained 15.5c to $9.37; and Auckland International Airport was up 8c to $8.65.
Port of Tauranga gained 8c to $6.38; Vulcan Steel increased 16c or 1.83 per cent to $8.91; Accordant Group added 8c or 5 per cent to $1.68; Eroad was up 3c or 5.26 per cent to 60c; Scott Technology improved 5c or 1.71 per cent to $2.98; and Move Logistics rebounded 7c or 9.21 per cent to 83c.
In the energy sector, Meridian and Mercury both gained 5c to $5.28 and $6.20 respectively.
Warehouse Group continued its slide, down 5c or 2.82 per cent to $1.72, while fellow retailers Hallenstein Glasson gained 10c or 1.89 per cent to $5.40, and Briscoe Group was down 11c or 2.34 per cent to $4.60.
MHM Automation was up 1c to 93c after shareholders at the special meeting backed the $60m purchase of Christchurch-based Wyma Engineering, a leading post-harvest vegetable and fruit handling equipment manufacturer with sales and service offices in Australia, the United Kingdom and the Czech Republic.
The acquisition will nearly double MHM’s revenue from $67.7m to $125m and increase its operating earnings (Ebitda) from $4.8m to $15.3m. The purchase includes $28m cash and $17m new shares (at 75c a share) to the Wyma owners who established their company in 1962.
Cancer diagnostic company Pacific Edge increased 2.5c or 5.43 per cent to 48.5c after earlier reporting record test volumes for the fourth quarter.
Chorus’ strong run came to a halt, declining 14.5c to $8.67. Napier Port was down 5c or 1.89 per cent to $2.60; Comvita gave up 5c or 1.74 per cent to $2.82; SkyCity declined 4c to $2.37; AFT Pharmaceuticals shed 5c to $3.50; and Oceania Healthcare decreased 2c or 2.86 per cent to 68c.
The leading bank ANZ was down 41c to $26.49, and Westpac declined 38c to $24.31.
Heartland Group was down 5c or 3.09 per cent to $1.57 after its bank completed a $100m subordinated note offer (including $25m over-subscriptions), with an interest rate of 7.51 per cent for the first five years.
Argosy Property was down 1.5c to $1.115 after earlier telling the market that its industrial, office and large-format retail portfolio had a 6.4 per cent or $146.4m reduction in valuation for the year ending March - $23.5m of the decrease was recognised in the half-year result.
Argosy said that unlike other cyclical softening periods, the market is benefiting from increased rentals as the capitalisation rates ease. Argosy’s adjusted net tangible asset value is $1.57 per share compared with $1.74 at the end of March last year.