Market close: Chorus, a2 Milk surges welcome relief for sharemarket

The New Zealand sharemarket put together an afternoon recovery. Photo / NZME

Chorus and a2 Milk, both surprising with positive outlooks, had strong gains and provided welcome relief to the New Zealand sharemarket, which put together an afternoon recovery.

The S&P/NZX 50 Index closed at 12,156.34, up 14.45 points or 0.12 per cent after reaching an intraday low of 12,071.15.

There were 89 decliners and 50 gainers across the whole market but trading was again light, with 28.59 million shares worth $132.96 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said all the focus was on Chorus and a2 Milk reporting its latest financial results.

He said Chorus surprised the market with a dividend increase and share buy-back. There is significant short selling interest in a2 Milk and its half-year result was no worse than was expected, and it indicated a better revenue return from increased marketing spend.

"There are signs that its China business is stabilising and it doesn't take much news to move its share price quite considerably," Goodson said.

Dairy infant formula company a2 Milk surged 69c or 12.28 per cent to $6.31 on trade worth $16.14m after reporting a 50 per fall in net profit to $59.62m on revenue of $660.54m, down 2.5 per cent, for the six months ending December.

The global marketer told the market that the revenue outlook has improved, and the full year will be higher than initially expected, driven by growth in the China and English labels. Associated company Synlait Milk, which supplies a2 Milk products, gained 9c or 2.65 per cent to $3.49.

Telecommunications firm Chorus rose 59c or 8.74 per cent to $7.34 after telling the market it will increase its annual dividend over the next three years and will conduct a $150m share buy-back.

Chorus reported a 56 per cent gain in net profit to $42m on steady revenue of $483m for the six months ending December. Operating earnings (ebitda) rose to $347m, from $328m, and its full-year forecast was increased to $665m-$685m, from $640m-$660m.

It is paying an interim dividend of 14c a share on April 12 and intends to increase the full-year dividend to 35c a share, up from the guidance of 26c, and then move to a minimum full-year of 40c in 2023 and 45c in 2024.

Fisher and Paykel Healthcare dragged the market down, falling 81c or 2.81 per cent to $28 on trade worth $14.38m; Mainfreight declined 85c to $79.10; and EBOS Group was down 35c to $40.70.

Fletcher Building, another one providing a positive outlook, was up 11c to $6.90.

Information management and courier company Freightways gained 5c to $12.35 after reporting a solid result with a 7.4 per cent increase in net profit to $43.67m on revenue of $441.98m, up 8 per cent, for the six months ending December.

Freightways' operating earnings (ebit) was up 5.6 per cent to $74.4m and it is paying an interim dividend of 18c a share on April 1. The company said it is encouraged by the strong trade in express package and the resilience of its information management business.

Retailers Briscoe Group was down 17c or 2.69 per cent to $6.14, and Hallenstein Glasson declined 10c to $6.20.

Among the energy companies, Mercury rose 11c or 1.86 to $6.03, but Trustpower fell 15c or 2.16 per cent to $6.79, and Vector was down 7c or 1.83 per cent to $3.75.

Retirement village operators Summerset Group Holdings was up 28c or 2.45 per cent to $11.72, and Ryman Healthcare was down 16c to $9.24.

Port of Tauranga declined 11c to $6.36; Stride Property decreased 4c or 2.01 per cent to $1.95; Investore Property was down 6c or 3.33 per cent to $1.74; Sky Network Television fell 7c or 2.72per cent to $2.50; and Tourism Holdings decreased 7c or 2.66 per cent to $2.56.

Scott Technology was down 10c or 3.01 per cent to $3.22; Pacific Edge declined 2c or 1.92 per cent to $1.02; Pushpay Holdings shed 2c or 2.04 per cent to 96c; and CDL Investments decreased 6.5c or 5.42 per cent to $1.135.

NZX fell 11c or 6.36 per cent to $1.62 after adjusting for its capital raise of $16m though an institutional entitlement offer to help fund its investment in Global Dairy Trade and replenish its balance sheets. A retail entitlement offer will follow.

Metro Performance Glass was down 4c or 11.27 per cent to 31.5c after downgrading its operating earnings (ebit) to $6m-$7m for the full year ending March – compared with $17.9m in the previous year. Net debt is expected to rise $5m to $53m driven by higher stock levels.

Among the gainers were SkyCity Entertainment, up 5c to $3.01; Millennium & Copthorne Hotels New Zealand increasing 7c or 3.15 per cent to $2.29, Steel & Tube gaining 4c or 2.6 per cent to $1.58; and Rakon rising 5c or 2.86 per cent to $1.80.