Fisher & Paykel Healthcare has suffered a blow in the last week. Photo / Supplied
Fisher & Paykel Healthcare's recent share price weakness is being blamed on a change in recommendations for Covid treatment out of the United Kingdom.
The UK's National Institute for Health and Care Excellence (NICE) indicated CPAP therapy should be the standard care for Covid patients rather than Fisher & Paykel's high-flow nasal oxygen (HFNO).
The findings were based on two controlled trials conducted in the midst of the UK's Covid pandemic which found CPAP therapy reduces the need for intubation in Covid-19 patients but HFNO does not provide any benefit over standard low-flow oxygen therapy.
JP Morgan analysis on the issue noted this was a "surprising and disappointing result for F&P". But said at this stage they did not expect clinical guideline in other jurisdictions to follow the UK's lead until the results of the trial were peer reviewed and published.
"The peer view process is likely to help clarify some concerns with the results including whether the relatively high rate of cross-over between the therapy groups or the lack of a clear protocol for escalating patients to intubation was likely to have had any bearing on the results."
JP Morgan estimate the impact on sales to the UK by F&P as a result of the change in guidance will only be small.
"We estimate sales for the UK account around 4 per cent of F&P's pre-Covid revenues from consumables for the humidification of ventilate patients. Given the small size of UK revenues and the fact the previous NICE guidelines recommended against HFNO for Covid patients, we believe the latest alert is unlikely to have a material impact on group earnings."
Harbour Asset Management's Shane Solly said the situation suggested there could be a bit more consolidation to come in F&P's share price.
"It's more raising a question than saying the treatment is no longer valid." But still he said investors had to take the issue seriously.
KiwiSaver manager Kiwi Wealth has paid out a bumper dividend of $15 million to its shareholder Kiwi Wealth Investments Limited Partnership - part of Kiwi Group Holdings which is owned by NZ Post, the NZ Super Fund and ACC.
Accounts for the company show the dividend payout was higher than its 2021 full year profit in which the company made $11.92m, up from $9.38m in its 2020 financial year.
That increase was driven by higher customer and client fees which rose from $43.53m to $51.9m over the year - most of this came from its KiwiSaver members rather than fees from its other managed funds.
Kiwi Wealth is New Zealand's sixth largest KiwiSaver provider with more than $6.12 billion in funds under management and a 7.4 per cent share of the market, according to Morningstar's June quarter report.
But it has a complicated ownership structure. Kiwi Wealth Investments Limited Partnership is controlled by Kiwi Wealth Management which is a subsidiary of Kiwi Group Holdings - a company which also owns Kiwibank.
The accounts also show a number of related party transactions within the group. Kiwi Wealth paid its shareholders $22.44m in investment management fees and $8.565m in personnel costs as well as $2m in other expenses.
It also paid Kiwibank $2.688m relating to income tax and $316,000 in other expenses.
The dividend was declared on August 23, a week after New Zealand was placed into a Covid-19 lockdown, and paid around August 25.
The state-owned Beijing Capital Group Co has appointed Citi as adviser for the sale of Waste Management in a deal that could be worth as much as US$1b ($1.4b).
Beijing Capital acquired Waste Management for $950m from ASX-listed Transpacific in 2014.
It was the first major international foray for the Chinese water treatment, waste management, mass transit railway, toll road and property company.
Stock Takes understands trade buyers like EnviroWaste are unlikely to put a bid in due to competition issues making it hard to get sign off from the Commerce Commission.
An initial public offer is also seen as unlikely but it could be an attractive asset for private equity bidders.
That will be seen as a disappointment to New Zealand fund managers who would welcome a return of the once highly profitable Waste Management, which delisted in 2006 after its amalgamation with Australia's Transpacific Industries.
The prospective deal is riding on the momentum of an industry that offers strong cash flows and rising public awareness of waste recycling.
The waste management unit has five landfills in New Zealand and operates 29 refuse transfer stations and more than 800 specialised waste collection vehicles. It has more than 1200 employees and handles more than 8500 tonnes of waste per day.
According to its latest filing to the New Zealand Companies Office, Beijing Capital Waste Management turned in a $258,000 loss for calendar 2020, down from a $16.9m profit in the previous year.
Revenue came to $503.4m in 2020 from $519.7m a year earlier, while net financing expenses shot up to $79.6m from $67.2m.
Z Energy shareholders will be expecting an update on the potential takeover bid by Ampol by the end of next week.
Ampol kicked off its four-week due diligence on August 26 despite the country being amid a Covid-19 lockdown.
Jarden analysts Grant Swanepoel and Luan Nguyen believe the hurdles of getting Commerce Commission and Overseas Investment Office approval for the takeover can be overcome but see some potential catches that could delay the outcome beyond six months.
These include the ComCom being delayed by the Christmas break, the OIO waiting until the ComCom has approved the deal before starting its own assessment, and Ampol's divestment of Gull not being the owner requirement for the deal to proceed.
"The ComCom could required the new Gull owners to retain the unique role that Gull plays in the retail fuel market."
They are also worried the timeframe could blow out by multiple government ministers being involved in the deal.
"This all could mean that it takes 12 months to conclude.
"This implies that the current indicative offer by Ampol of $3.78, with a 10c top-up accrued at 0.055c per day if the deal takes longer than March 31 2022 to conclude equates to a time-weighted offer of $3.88 per share at September 2022."
They suggest a meaningful break free could also be one option used by the investor to mitigate the potential 12-month risk.
Wellington International Airport, which is 66 per cent owned by Infratil and 34 per cent owned by Wellington City Council, is seeking to raise up to $75m through its latest bond offer.
The airport, which is New Zealand's third largest, already has five other listed bonds on the NZX's debt market but this one is paying a significantly higher interest rate than previous issues.
A term sheet for the 10-year bond puts its prospective margin range at between 1.55 per cent and 1.75 per cent per annum over the underlying swap rate but it is subject to a minimum interest rate of 3.25 per cent per annum.
Previous interest rates for its bonds have topped out at 2.55 per cent per annum.
That could indicate investors face a potentially higher risk on this investment than previous bond offers.
Wellington airport handled 64,000 flights and three million passengers in the year to March 31.
Capacity for FY21 was 59 per cent of its pre-Covid levels. In July it was back to 93 per cent of its pre-Covid levels but then the transtasman bubble slammed shut again.
Indications are that the bubble is unlikely to open again before the end of this year, limiting international travel to those prepared to go through two weeks managed isolation.
The margin and interest rate will be set today following a bookbuild process before its listing on the NZDX.
Heir's vision becomes a reality: 'Dad wanted this to be the best' – James Kirkpatrick jnr.