Market close: Sharemarket shooting towards all-time high

The S&P/NZX 50 Index was boosted by better-than-expected company results. Photo / File

The New Zealand sharemarket is shooting towards its all-time high after the bluest of the blue chip stocks Fisher and Paykel Healthcare provided an upbeat result.

The S&P/NZX 50 Index was boosted by better-than-expected company results and rose 176.17 points or 1.51 per cent to 11,849.13 after hitting 11,899.53 during the day. Trading was strong at 73.19 million shares worth $233.93 million, and there were 109 gainers and 33 decliners over the whole market.

The index is 224 points or about 3 per cent shy of the record 12,073.34 achieved on February 21 this year – and all this recovery has been achieved in four and a half months since the late March lockdown.

"The headline figures in the results are not fantastic but operationally the companies are doing better than expected and the reporting season has been welcomed so far," said Jeremy Sullivan, investment adviser with Hamilton Hindin Greene.

"The analysts, for instance, upgraded Summerset Group after reporting a flat result but better-than-expected operational earnings," he said.

"Fisher and Paykel [Healthcare] had a very good result, though they are talking things down in their guidance. While Covid continues to expand, there will be massive demand for their services but if a vaccine is rolled out, the demand will slow," he said.

Summerset jumped 50c or 6.44 per cent to $8.27, while Fisher and Paykel Healthcare leapt $1.50 or 4.29 per cent to $36.50 on trade worth $58.9m, a quarter of the value of the market trading.

Fisher and Paykel Healthcare, having the biggest market capitalisation at $21 billion (apart from dual-listed banking stocks), predicted more than 10 per cent increase in revenue to $1.68b and net profit of between $365m and $385m on its previous guidance for the present 2021 financial year. The company in June estimated full-year operating revenue at $1.48b and net profit of $235-$340m.

Fisher and Paykel Healthcare said in the first four months of the 2021 financial year hospital consumable (face masks, tubes and filters) revenue grew 48 per cent, humidifiers surged 390 per cent, and overall hospital product (consumable and hardware) revenue increased 91 per cent compared with the same period last year.

The updated guidance assumed global hospitalisations requiring respiratory support will steadily return to normal by the end of this calendar year, and countries will continue to build respiratory care infrastructure requiring Fisher and Paykel humidifiers.

Mercury Energy rose 13c or 2.66 per cent to $5.01 after reporting operating earnings of $494m, down $12m or 2 per cent, for the year ending June 30, and net profit of $207m, down from the record $357m last year. That result benefitted from the $177m sale of its Metrix smart metering business in the 2019 financial year.

Shareholders were smiling when Mercury announced a fully-imputed final dividend of 9.4c a share and a total for the year of 15.8c a share, an increase of 2 per cent on the previous year. This is Mercury's 12th consecutive year of dividend growth and is heading for No 13 by estimating the 2021 dividend will be 17c a share, a 7.6 per cent increase.

Agribusiness PGG Wrightson fell 7c or 2.6 per cent to $2.62 after maintaining steady revenue of $788m for the year ending June 30, compared with $798.8m in 2019. Its net profit slipped to $7.84m compared with the previous $131.8m, which included the sale of its seeds business.

Westpac is not paying a first half 2020 dividend in favour of retaining a strong balance sheet and its share price fell 56c to $19. Westpac's unaudited net profit for the third quarter 2020 was $1.12 – the quarterly average of the first half was $595m.

Amongst the biggest gainers, medicinal cannabis company Cannasouth rose 6c or 10 per cent to 66c and Burger Fuel increased 2.5c or 6.76 per cent to 39.5c.