Market close: Mainfreight, Sanford provide excitement to flat sharemarket

Sanford surged 95c or 21.35 per cent to $5.40. Photo / Supplied

Mainfreight, heading for a well-earned century, and Sanford, welcoming a new substantial shareholder, provided the excitement to an otherwise lethargic New Zealand sharemarket.

A new addition to the FTSE mid-cap index, Mainfreight provided another upbeat trading update and headed towards an historical share price of $100.

The S&P/NZX 50 Index, instead, traded flat and closed at 13,243.49 up 24.66 points or 0.19 per cent, after having a lunch-time dip and falling to an intraday low of 13,170.44.

There were 76 gainers and 62 decliners across the whole market on steady volume of 77.32 million share transactions worth $223.78 million.

Mainfreight rose $4.52 or 4.81 per cent to $98.52 after reaching an intraday high of $99.78 – so close to becoming the first New Zealand listed company to reach $100. Mainfreight is now the fourth largest stock on market capitalisation of $9.92 billion, behind Fisher and Paykel Healthcare, Meridian and Auckland International Airport.

The global transport and logistics operator sees no end to its growth. Mainfreight's revenue in the past 22 weeks of trading rose 43 per cent to $2.22b and profit before tax increased 83 per cent to $142.27m. The Americas and Asia divisions had 73 per cent and 177 per cent increases in revenue respectively.

Mainfreight told the market that Covid lockdown restrictions in New Zealand saw a lower-than-expected decrease in revenue, while Australian trading continued unabated. Since the New Zealand lockdown, group weekly profitability still remained ahead of the previous corresponding period.

Shane Solly, portfolio manager with Harbour Asset Management, said Mainfreight's valuation multiples are not stretched compared with global businesses and it still has more growth to come. "It's a 100-year company and reaching $100, if it gets there, is a great achievement for New Zealand."

Sanford surged 95c or 21.35 per cent to $5.40, hitting an intraday high of $5.51, after South Island iwi organisation Ngai Tahu Investments said it is looking to build a shareholding of 23.6 per cent, at a share price of $5.50.

Ngai Tahu Holdings Corporation then provided a substantial holder notice to the market, saying it has already increased its stake to 12.563 per cent. This boosted the day's trading with 20.9 million Sanford shares worth $78.5m changing hands.

The buying came a day after Sanford said weaker mussel sales was holding back an expected increase in performance over the second half of the financial year. Ngai Tahu has told Sanford it has no current intention to make a takeover offer based on present circumstances.

Solly said Sanford has gone through some tough times during the Covid pandemic and Ngai Tahu has taken a meaningful stake in its business. Ngai Tahu will have a long-term outlook and this will work better for Sanford than other substantial shareholders.

The local market was dragged down by Fisher and Paykel Healthcare, declining 29c to $32.81; Fletcher Building falling 12c to $7.37; a2 Milk decreasing 9c to $5.94; Synlait shedding 7c or 2.12 per cent to $3.23; and Port of Tauranga losing 7c to $7.39.

South Port New Zealand was up 10c to $9; and Marsden Maritime Holdings increased 12c or 1.93 per cent to $5.34.

Wine exporter Delegat Group was down 45c or 3.09 per cent to $14.10 after earlier providing a steady annual result and paying a final dividend of 20c a share. DGL Group declined 9c or 3.5 per cent to $2.48.

The Carbon Fund, managed by Salt Asset Management, rose 17c or 9.94 per cent to $1.88 as demand exceeds the supply of carbon credits.

Summerset Group Holdings gained 19c to $15.29; Scales Corporation increased 14c or 2.79 per cent to $5.15; SkyCity Entertainment collected 6c or 1.84 per cent to $3.32; Turners Automotive rose 15c or 3.46 per cent to $4.48; Scott Technology was up 12c or 4.24 per cent to $2.95; Precinct Properties picked up 3c or 2.54 per cent to $1.21; and Evolve Education was up 4c or 6.35 per cent to 67c.

Sky Network Television gained a further 0.003c to 19.3c after American investment firm Osmium Partners built a 5.7 per cent stake by buying 85.65m shares in New Zealand and 13.9m in Australia. Osmium also has a 19.1 per cent holding in NZME, whose share price rose 3c or 3.16 per cent to 98c. Sky CEO Sophie Moloney also disclosed an on-market buy.

Plexure Group went into a trading halt after announcing a capital raise of up to A$20m ($20.8m) at A50c (NZ52c) a share to help fund the purchase of Australian Task Retail. Plexure is raising A$15m through an institutional placement, with customer and shareholder McDonald's taking up 9.9 per cent, and $5.2m to New Zealand shareholders. Plexure last traded at 54c.