The New Zealand sharemarket shrugged off a subdued full-year result from Contact Energy, while Vital Healthcare Property Trust also suffered a significant profit fall.
The S&P/NZX 50 Index crept ahead 36.76 points or 0.32 per cent to 11,683.44. Without the offshore buyers, trading was very light with 30.53 million shares worth $106.78 million changing hands. There were 89 gainers and 50 decliners over the whole market.
Contact's share price rose 12c to $6.22 on $5.7m worth of trading despite posting a 63.8 per cent decline in net profit to $125m for the year ending June 30. Operational earnings were down $54m or 11 per cent to $451m. Last year's net profit of $345m was boosted by a $170m gain on the sale of Ahuroa gas storage facility and Rockgas LPG.
Contact's total revenue fell 17.7 per cent to $2.07 billion due to lower wholesales prices and reduced production from the Clutha hydro scheme. The electricity retailer, which has 500,000 customer connections, delivered a final dividend of 23c a share and year's total of 39c a share. But it warned the level of future dividends will be reconsidered because of the likely disruption in the sector, particularly the impact of the Tiwai Point smelter closure.
Forsyth Barr investment adviser, Dan Stratful, said Contact's dividend will not likely stay the same next year or the year after. "They are being prudent as the market adjusts to the post-smelter world." The firm's analysts have forecast the total dividend will remain stuck at 32c a share over the next three years.
Fellow gentailer Meridian was "punished" in contrast to Contact after saying it expected the aluminium smelter to close on August 31 next year – even though it has put a confidential proposal to owner New Zealand Aluminium Smelters to shut down over a period of four years. Meridian fell 16c to $4.82, and Mercury was also down 5c to $4.7.
Net profit from Vital Healthcare, Australasia's only listed hospital and medical property trust, slipped 37.78 per cent to $58.12m for the June year, with revaluation gains reaching $45m compared with $103m last year. Revenue was up 2.52 per cent to $100.14m and Vital's share price slipped 0.5c to $2.625.
Outside the main index, the day's biggest gainer was Just Life Group , up 6.5c or 14.94 per cent to 50c, flowing on from Friday's announcement that its unaudited profit before tax for the June year will increase from $2.6m to $3.9m. However, there were just 31 trades worth $3779.
Steel and Tube Holdings reported it was on the mend, saying its full-year normalised earnings before interest and tax (ebit) should be nearing break even, make that a loss of $5-$7m, with operating cash flows of about $26m and inventory reduced to $101m.
The steel fabricator, which listed on the New Zealand Stock Exchange in 1967, said it had agreed temporary revised covenants with its banking syndicate till the end of next year – which it expected to comfortably meet – and its share price rose 2c or 3.57 per cent to 58c.
Communications component maker Rakon was up 1.5c or 5 per cent to 31.5c after telling its shareholders at the annual meeting that ebitda was expected to increase to between $16m and $18m, from $14.8m, for the financial year ending March 2021. Demand for 5G business is likely to grow.
NZME increased 2c or 8 per cent to 27c. "Some of the smaller caps (stocks) are going up after missing out on the Covid recovery," said Stratful.