Small cap stocks provide positive news as NZX stuck in negative territory - Market close

NZ King Salmon Investments reported a 12 per cent increase in revenue to $187.1m and a rise in net profit from $1.9m to $28.45m for the 12 months ending January. Photo / Jim Tannock

Two small cap stocks, Savor Group and NZ King Salmon Investments, staged strong earnings turnarounds but the New Zealand sharemarket remained stuck in negative territory.

The S&P/NZX 50 Index had a topsy turvy day, trading between 11,981.55 and 12,035.77 before closing at 12,010.66, down 21.15 points or 0.18 per cent.

There were 73 gainers and 66 decliners over the whole market on volumes of 34.29 million share transactions worth $141.48 million.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said it was good to see a couple of upgrades on the NZX.

“The turnarounds by Savor and NZ King Salmon will be pleasing for shareholders. Apart from the stand-outs of the two smaller caps, the market was quiet and is still looking to interest rate cuts as a key catalyst,” Sullivan said.

The Government’s Budget Policy Statement had little impact on the market, despite Finance Minister Nicola Willis suggesting that the books won’t be back in surplus by 2026/27 as expected and the tax cuts may not be at the same levels that National campaigned on.

Willis indicated that the operating allowance for Budget 2024 will be less than the $3.5 billion signalled at the half-year fiscal update.

An interim update to the Treasury’s economic outlook pointed to a much smaller nominal economy over the next four years and less tax revenue of some $14b.

ANZ Research said “our attempts to net out the weak economic signal with today’s discretionary policy suggests bond issuance could be upgraded by around $10-12b over the next four years come Budget”.

Hospitality group Savor surged 7c or 36.84 per cent to 26c after telling the market it expects increased revenue of more than $60m ($52m in the 2023 financial year) and operating earnings of $8.5m-$9m for the 12 months ending March.

Savor said it will begin utilising the significant balance of historical tax losses and net profit is expected to be $1.5m-$2m. The company has organised new banking arrangements with ANZ.

NZ King Salmon Investments, up 1c or 3.85 per cent to 27c, reported a 12 per cent increase in revenue to $187.1m and a rise in net profit from $1.9m to $28.45m for the 12 months ending January.

The salmon farmer harvested 6238 metric tonnes compared with 6014 tonnes in the previous year, and mortality expenses fell from $25.9m to $12.6m. NZ King is forecasting operating earnings (ebitda) of $26m-$32m for the 2025 financial year compared with $24.5m last year.

A market leader Ebos Group declined 45c to $33.85 and has fallen more than 25 per cent over the last 12 months.

Skellerup Holdings fell 19c or 4.26 per cent to $4.27; Tourism Holdings was down 11c or 3.49 per cent to a six-month low of $3.04; Serko declined 7c or 1.82 per cent to $3.78; and Arvida Group decreased 2c or 1.83 per cent to $1.07.

In the energy sector, Manawa rose 16c or 3.57 per cent to $4.64; Genesis increased 6c or 2.5 per cent to $2.46; Meridian was up 5c to $5.90; and Mercury was down 9c to $6.71.

In the property sector, Goodman Trust was down 5.5c or 2.41 per cent to $2.23; Kiwi shed 2.5c or 2.94 per cent to 82.5c; and Argosy declined 2c or 1.72 per cent to $1.14.

NZME was down 2c or 2.25 per cent to 87c; Allied Farmers fell 5c or 6.25 per cent to 75c; and Green Cross Health was down 2c or 1.92 per cent to $1.02.

Other decliners were Enprise Group shedding 1.5c or 3.03 per cent to 48c; ikeGPS down 2c or 4.76 per cent to 40c; and Foley Wines declining 3c or 2.86 per cent to $1.02.

Restaurant Brands rose 32c or 9.7 per cent to $3.62; Freightways collected 12c to $8.57; Vulcan Steel gained 20c or 2.25 per cent to $9.10; Comvita rebounded 4c or 1.96 per cent to $2.08; and Synlait Milk added 3c or 4.17 per cent to 75c.

NZ Rural Land was up 2c or 2.22 per cent to 92c; CDL Investments gained 2c or 2.56 per cent to 80c; NZ Oil & Gas increased 3c or 7.41 per cent to 43.5c; and 2 Cheap Cars added 2c or 2.6 per cent to 79c.

Kingfish, which invests in New Zealand stocks, celebrated 20 years as a listed company by gaining 1c to $1.23. Over that period Kingfish has had a total shareholder return of 9.4 per cent a year.