The New Zealand sharemarket continued to sag, losing nearly one per cent, despite solid annual results from car retailer Turners Automotive and retirement village operator Arvida, and a rebound by meal kit company My Food Bag.
The S&P/NZX 50 Index fell 107.8 points or 0.87 per cent to 12,341.19 after reaching a morning high of 12,461.02 but it was downhill after that. There were 72 gainers and 58 decliners over the whole market of 187 stocks on robust volume of 37.4 million share transactions worth $181.4 million.
Dan Stratful, investment adviser with Forsyth Barr, said the local market continues to underperform compared with its international peers. "We have a high (dividend) yield market with interest rate sensitive stocks."
The New Zealand market took no notice of the rallies overseas. Overnight on Wall Street, the Dow Jones Industrial Average gained 0.54 per cent to 34,393.98; the S&P 500 Index was up 0.99 per cent to 4197.05; and the technology-driven Nasdaq Composite climbed 1.41 per cent to 13,661.17.
The Australian S&P/ASX 200 Index had risen 0.79 per cent to 7101.4 points at 5.45pm (NZ time).
Arvida Group increased 2c to $1.83 after announcing a record net profit of $131.11m, up 207 per cent thanks to a revaluation gain, on revenue of $174.45m for the year ending March. Arvida is paying a final quarterly dividend of 1.5c a share on June 10, and it now has $2.18 billion worth of assets, having built 247 new units in the past year.
Fellow retirement village operator Oceania Healthcare rose 4c or 3.01 per cent to $1.37, while Ryman Healthcare – the subject of two broker downgrades this week – was down a further 28c or 2.13 per cent to $12.87.
Stratful said it's a taken a while for investors to gain confidence in Arvida compared with the leading companies, Ryman and Summerset Group Holdings. "But it's done that with this result – Arvida relies more on care fees than revaluation – and it looks like people are selling Ryman and buying into Arvida and Oceania."
Turners Automotive climbed 15c or 3.94 per cent to $3.96 after reporting a 28 per cent increase in net profit on reduced revenue of $296.51m for the year ending March, showing its costs are under control. Turners said business momentum of the past 10 months has continued, and April and early May's financial results were ahead of the same periods in 2019.
Stratful said once people realised they couldn't travel, they redirected their spending to cars, as well as retail and homes. Turners had a strong result and a positive outlook for the start of the new financial year.
The market was driven down by Fisher and Paykel Healthcare, which fell $1.37 or 4.03 per cent to $32.63 ahead of Thursday's annual result announcement. Stratful said "there's no doubt it will be a record full-year performance by a long way, both profit and revenue, and the market will be looking 'where to from here' for Fisher and Paykel."
Ebos Group, which has a broker's target price of $35, was down 20c to $32.77; a2 Milk slipped 10c or 1.71 per cent to $5.76 after reaching an intraday high of $6.03; Comvita fell 15c or 4.29 per cent to $3.35; and The Warehouse Group declined 7c or 2.01 per cent to $3.42.
Interest rate sensitive stocks Contact fell 16c or 2.05 per cent to $7.65; Mercury was down 12c or 1.83 per cent to $6.45; and Chorus declined 6c to $6.535.
My Food Bag, which offers a gross dividend yield of nearly 5 per cent, recovered 14c or 10.29 per cent to $1.50. "May be the selling was exhausted following its full-year result and bit of bargain hunting came in," said Stratful.
Skellerup Holdings rose 15c or 3.36 per cent to $4.62; Restaurant Brands was up 27c or 1.98 per cent to $13.90; and Goodman Property Trust gained 2.8c to $2.24 even though it went ex-dividend.
Napier Port declined 7c or 2.09 per cent to $3.28 after reporting a 14.9 per cent fall in net profit to $10.57m for the six months ending, primarily because of tax depreciation on commercial buildings. Revenue was steady at $52.58m, underpinned by a 20.6 per cent increase in log exports to 1.43m tonnes.
The port company is resuming its interim dividend of 2.8c a share payable on June 25, and reiterated its operating earnings of $39m-$42m for the year ending September.
New Zealand Oil & Gas Group and its subsidiary Cue Energy Resources is taking stakes of up to 50 per cent in Central Petroleum's three gas producing projects in the Amadeus Basin off Northern Territory in Australia for $31m. NZOG's share price edged ahead 1c or 2.44 per cent to 42c.