Market close: Fletcher Building pulls market higher after strong result

Photo / NZME

Halfway through the first week of earnings season, Fletcher Building was the biggest news on the market today after the building materials and construction services company lifted its annual net profit by 42 per cent and beat its own guidance for operating profit.

The Reserve Bank went along with market expectations and lifted the official cash rate (OCR) by another 50 basis points to 3 per cent this afternoon. The central bank also signalled further hikes are to come with the possibility of hiking all the way to 4.1 per cent early next year.

The S&P/NZX 50 index rose 5.7 points, or 0.05 per cent, to 11,852.93. Turnover on the main board was $105.1 million.

Fletcher Building reported a $432m net profit for the year ended June compared with $305m the previous year, with earnings before interest and tax (Ebit) up $756m compared with the company's $750m guidance.

Chief executive Ross Taylor said the performance highlighted Fletcher's ability to deal with a "dynamic operating environment" while remaining focused on long-term and sustainable growth. The company has forecast that its target for the current year will be to beat the 2022 Ebit result by more than $100m.

Fletcher shares jumped 4.9 per cent when the market opened this morning. By the end of the day, its shares were up 1.3 per cent to $5.55 and were the most traded stock on the index with $13.4m changing hands.

Nikko Asset Management's head of equities Stuart Williams said Fletcher's results were pretty much in line with what the company had already revealed. "So, no surprises there, which is – generally speaking – a good thing," he said.

A few other big companies are set to release results before the first week of earnings season comes to a close. NZ's largest kiwifruit grower Seeka releases its half-year results tomorrow and Precinct Properties will reveal its annual earnings.

The property company's shares fell 0.34 per cent to $1.45 by early evening trading while Seeka's shares dropped 4 per cent to $4.37.

Auckland International Airport results are out tomorrow morning and the company's shares were up 0.65 per cent to $7.75. Air NZ also has its results out next week on Thursday, its shares fell 0.72 per cent to 68.5 cents today.

Turners Automotive, the largest used car network in NZ, told shareholders at its annual meeting today that car dealers were leaving the NZ market which meant there was an opportunity for the "strong to get stronger". The company also announced last week it had partnered with online investment platform Sharesies to launch an employee share scheme. Its shares were flat at $3.80 by the end of the day.

Stocks that had a good day included communication services firm Vital which was up 11.1 per cent to 40 cents per share today. Campervan rental business Tourism Holdings rose 2.4 per cent to $2.60 while market operator NZX was up 2.3 per cent to $1.31, the third day in a row this week the stock has risen.

On the currency front, the NZ dollar was sitting on 63.60 US cents at 5pm today, up from 63.58 US cents yesterday.

- BusinessDesk