Cinema software management firm Vista Group declined 13c or 7.6 per cent to $1.58 and has fallen nearly 17 per cent in two trading days since announcing a half-year net loss of $8.5m.
The government’s $4 billion cost-cutting move and a passive speech from the United States Federal Reserve governor underpinned a firmer tone on the New Zealand sharemarket.
The S&P/NZX 50 Index had a very steady afternoon and closed at 11,479.01, up 11.35 points or 0.10 per cent.
There were 60 gainers and 70 decliners over the whole market on volumes of 38.35 million share transactions worth $112.67m. The trading was dominated by Smartshares NZ Cash Exchange Traded Fund with 17.55 million units worth $53.02m changing hands.
Over the weekend, US Federal Reserve Governor Jerome Powell indicated there wouldn’t be any more interest rate rises soon, saying the economy is proving more resilient than expected.
Speaking at the Fed’s annual conference in Jackson Hole, Powell said the central bank would remain data dependent, with the full effect of rate hikes yet to work their way into the economy.
Back home, the government announced an additional $4b in public service savings, including consultant costs. This follows a $2b deficit in tax revenue.
Finance Minister Grant Robertson said “since May we have seen further deterioration in the global economy, particularly in China. This will continue to have a direct impact on the New Zealand economy, and it is important that the Government responds to meet our balanced and responsible fiscal goals”.
Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the government spending cuts will help reduce inflation.
“The government was seen as adding to inflation with its expenditure programme and the reduction will be welcomed by the market.
“On top of this, we had a measured speech from Jerome Powell and offshore markets were positive,” Sullivan said.
The Dow Jones Industrial Average was up 0.73 per cent to 34,346.9 points; S&P 500 gaining 0.67 per cent to 4405.71; and Nasdaq Composite increasing 0.94 per cent to 13,590.65 and rising 30 per cent so far this year.
In the only local financial result for the day, Restaurant Brands was down 1c to $4.55 after reporting a 9.4 per cent increase in revenue, a record, to $640.2m and an 85.6 per cent dive in net profit to $2.18m, from $15.3m, for the six months ending June. Full-year net profit is expected to be $12m-$16m, operating earnings (ebitda) were $78.3m, down $7.1m.
The fast-food operator opened 10 new stores during the six-month period but was impacted by inflation, particularly rising ingredients and wage costs. Restaurant Brands said it was not able to raise prices fully to offset the cost increases without impacting transaction volumes.
Cinema software management firm Vista Group declined 13c or 7.6 per cent to $1.58 and has fallen nearly 17 per cent in two trading days since announcing a half-year net loss of $8.5m.
Fletcher Building was up 4c to $4.92; Fonterra Shareholders’ Fund increased 8c or 2.55 per cent to $3.22; and a2 Milk improved 7c to $5.11, regaining a lot of the fall from its latest result.
In the energy sector, Meridian increased 6c to $5.35; Mercury added 8c to $6.35; Contact was up 6c to $8.30; and Genesis was down 4.5c or 1.83 per cent to $2.41.
Third Age Health Services rose 10c or 6.99 per cent to $1.53; MHM Automation was up 3c or 3.09 per cent to $1; and Move Logistics gained 2c or 2.63 per cent to 78c.
IkeGPS increased 4c or 5.88 per cent to 72c after signing an extension contract with an American infrastructure customer worth at least $1.5m. This customer is utilising the IKE software platform to speed the engineering assessment of ultimately more than one million distribution network pole assets.
Infratil, up 4c to $10.07, has opened a 7½ year, $50m infrastructure bond offer, with the ability to accept oversubscriptions up to $25m. Resident holders can also exchange some of their maturing 2023 bonds for the 2031 bonds.
Mainfreight was down 50c to $65.50; Summerset Group slipped 11c to $9.86; Gentrack declined 9c or 2.05 per cent to $4.31; Briscoe Group decreased 6c to $4.60; PGG Wrightson shed 7c to $4; and Smartpay Holdings fell 5c or 3.13 per cent to $1.55.
Delegat Group declined 11c to $8.36 after reporting a stable full-year in line with market expectation. Delegat talked of recovering demand in its core UK and Ireland markets.
Other decliners were Seeka falling 14c or 5.3 per cent to $2.50; Scott Technology down 10c or 2.99 per cent to $3.25; NZME decreasing 2c or 2.13 per cent to 92c; Carbon Fund shedding 4c or 2.19 per cent to $1.79; and Blackpearl Group down 4c or 7.14 per cent to 52c.
ANZ Bank, down 20c to $26.60, has filed an application with the Australian Competition Tribunal to review the Australian Competition and Consumer Commission’s decision not to approve the purchase of the Suncorp Bank.
Steel & Tube was down 4c or 3.28 per cent to $1.18. The steel processor and distributor earlier reported steady revenue of $589.1m, operating earnings (ebitda) of $51.9m, and net profit of $17m, down 43.7 per cent. Volumes were down 12.4 per cent but pricing “remains elevated”.
Steel & Tube has no bank debt and is paying a final dividend of 4c a share on September 22.