Another day of red as investors digest earnings - Market close

The big gainer of the day was Summerset, which saw its share price rise 3.44 per cent to $11.12.

The New Zealand sharemarket was marginally down to start the week as investors digested another set of corporate earnings.

The S&P/NZX 50 Index closed at 11730.88, down 9.931 points or 0.08 per cent. There were 72 gainers and 71 decliners over the whole market on volumes of $32.6 million share transactions worth $105.8m.

“[Monday] was another day in the red,” Forsyth Barr investment adviser David Price said, speaking to BusinessDesk just before the day’s close. “Volumes were all right, but there was not much green on the screen.”

Investors are also awaiting this Wednesday’s monetary policy decision by the Reserve Bank of NZ (RBNZ). The Official Cash Rate (OCR) is currently at 5.50 per cent, and while most economists expect it to remain on hold, at least two banks are predicting a 25 basis point rate hike to 5.75 per cent.

Earnings season continues

The big gainer of the day was Summerset, which saw its share price rise 3.44 per cent to $11.12.

New Zealand’s second-largest listed retirement village owner-operator reported an increased bottom-line profit by 62 per cent to the NZ stock exchange (NZX).

“It is all about their improved margins,” Price said, adding the company has been outperforming its leading competitor, Ryman Healthcare, in recent months, which fell almost 12 per cent to a near 12-year low early last week.

After some recovery since then, Ryman Healthcare’s plight continued. The company’s shares declined 1.78 per cent to $4.60.

After spending most of the day down, KFC, Pizza Hut, Carl’s Jr and Taco Bell operator Restaurant Brands grew slightly by 0.3 per cent to $3.50 despite reporting a 49.3 per cent profit loss compared with the previous financial year.

Margins in all regions – NZ, Australia, Hawaii and California – which were hit heavily by inflation and minimum wage rises, were showing signs of recovery, the company said.

Chief executive Arif Khan told BusinessDesk he was “very pleased” with the second half of the year after inflation ate heavily into profits in the six months to June.

Likewise, Property for Industry got off largely scot-free. The warehouse and logistics specialist recorded a $97.8m net loss after tax in its latest year following portfolio devaluations. At closing, the company was down only 0.22 per cent to $2.22.

The market responded less favourably to Michael Hill International’s earnings. The jewellery retailer fell 4.82 per cent to $0.79 off the back of some disappointing margins reported in its half-yearly results.

In other news

Meanwhile, the market responded well to Goodman Property Trust’s announcement that it will pay $290m to its Australian-listed management company and shareholder Goodman Group to internalise its management function.

The company’s shares were trading at $2.17, up 2.6 per cent.

NZ energy companies Mercury, Genesis and Meridian were down 1.0 per cent, 1.78 per cent and 1.53 per cent, respectively.

Mercury and Genesis were traded in low volumes, while Meridian was the highest traded stock, reaching nearly $10m by close.

Shares in Fletcher Building were the second highest traded of the day. The share has recovered from its low of $3.35 on Thursday. It rose 1.32 per cent to $3.85 in Monday’s trading.

Forsyth Barr’s Price said investors are buying back into Fletcher’s after they “threw the baby out with the bathwater” over the last couple of weeks.