Market close: Mainfreight shares rise after delivering 20pc gross profit bump

Global transport and logistics company Mainfreight increased $1 to $72 after providing a sneak preview to its latest annual result.

The New Zealand sharemarket moved into the Matariki holiday with a near 1 per cent gain on confidence that inflation is being tamed and bond yields have peaked.

Mainfreight went higher after overcoming challenging trading conditions to record another positive annual result.

The S&P/NZX 50 Index climbed steadily from lunchtime and closed at 12,013.43, up 105.16 points or 0.88 per cent on light trading.

There were 89 gainers and 41 decliners on the main board, with 23.23 million shares worth $82.45 million changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said two brokers told him it was the quietest day they can remember for responses from fund managers – except for the two and a half days trading between Christmas and New Year.

“Lots of people are having a very long weekend. There was a positive undertone to the market but volumes were light, with some smaller stocks moving around,” he said.

“The United States consumer price index (CPI) was lower than expected, house prices in New Zealand are into their fourth month of growth though annual growth is still negative, and the government ruled out a wealth tax which is good for the market. All these (factors) have added more confidence,” Robertshawe said.

The US June CPI increased 3 per cent with economists expecting 3.1 per cent. This fuelled hope that the Federal Reserve can bring down inflation without pushing the economy into a recession.

The S&P 500 Index reached a new high for the year after increasing 0.74 per cent to 4472.16 points. And the technology-driven Nasdaq Composite kept climbing, up 1.15 per cent to 13,918.96 and rising 33 per cent so far this year.

In New Zealand, food prices increased 12.5 per cent in the year ending June, matching the highest level for 36 years seen in April. Fruit and vegetable prices rose 22 per cent compared with June last year; groceries were up 12.8 per cent; meat, poultry and fish increased 11 per cent.

The only categories rising by single-digit figures were non-alcoholic beverage prices, up 9.7 per cent, and restaurant and ready-to-eat food prices, increasing 9.2 per cent.

ANZ Research, however, expects annual CPI inflation, released next week, to decline to 5.9 per cent, below the Reserve Bank’s forecast of 6.1 per cent.

Global transport and logistics company Mainfreight increased $1 to $72 after providing a preview to its latest annual result in the July newsletter sent to more than 11,300 staff members in 331 branches across 26 countries, and to the market.

Mainfreight increased revenue by $457m to $5.68 billion and gross profit by $98m or 20 per cent to $587m – the result coming from a strong first half of trading.

Mainfreight said “our performance during the second half fell short of expectations as international freight congestion unravelled, which included a reduction in sea and airfreight rates.

“While this provided much needed rate relief and space availability for our customers, it has slowed our performance from the strong levels of growth we encountered over the past two years.”

Over the past year Mainfreight added 34 more branches, 2071 staff and one country location (Indonesia), and over the past two years sales revenue has increased 60 per cent and gross profit 124 per cent.

Mainfreight is investing $676m for further growth through to the end of 2025, and said the softening economic environment provides opportunities where competitors weaken or disappear and customers are looking for efficient, high-quality services.

Robertshawe said the Mainfreight result isn’t surprising. “But I’m a little surprised at how strong the share price has been. Mainfreight went ex-dividend this week and investors appear to be looking through the valley of a cyclical downturn because it’s such a high-quality stock.”

Fisher and Paykel Healthcare was up 27c to $24.46; Auckland International Airport gained 7c to $8.40; Meridian Energy added 5c to $5.55; a2 Milk collected 10c or 1.84 per cent to $5.53; and Fletcher Building increased 17c or 3.14 per cent to $5.58 as the housing market improves.

Chorus gained 11c to $8.41; Infratil was up 13c to $9.99, Scales Corp collected 11c or 3.32 per cent to $3.42; Heartland Group improved 4c or 2.26 per cent to $1.81; and Tourism Holdings was up 7c or 1.98 per cent to $3.60.

The retirement sector is also benefitting from the recovering housing market. Summerset Group was up 10c to $10.45; Ryman Healthcare added 5c to $6.90; Oceania Healthcare increased 2c or 2.56 per cent to 80c; and Arvida Group increased 3c or 2.44 per cent.

Vista Group gained 5c or 2.78 per cent to $1.85; Black Pearl Group rose 11c or 23.91 per cent to 57c; My Food Bag was up 1c or 4.55 per cent to 23c; and 2 Cheap Cars increased 7c or 13.46 per cent to 59c, having doubled its share price over the past two weeks.

Comvita fell 12c or 3.73 per cent to $3.10; NZME was down 3c or 3.13 per cent to 93c; Sky TV shed 4c to $2.40; PGG Wrightson declined 9c or 2.15 per cent to $4.10; and Move Logistics decreased 2c or 2.38 per cent to 82c.