MARKET CLOSE: NZX50 gains on Mainfreight earnings

MARKET CLOSE: NZ stocks rise as corporate earnings hit forecasts

By Jason Krupp

Aug. 19 (BusinessDesk) – New Zealand stocks rose as corporate earnings were largely in line with market expectations, with Mainfreight Ltd. leading the way higher as its first-quarter profit surged.

The NZX 50 rose 11.6 points, or 0.4%, to 3029.8. Within the index 20 stocks rose, 15 fell and 15 were unchanged. Turnover on the day was $64.7 million.

“New Zealand results have met forecasts so far, and there haven’t been any real issues with companies missing targets, which is why markets are trading in positive territory,” said Craig Brown, who helps manage $1.1 billion in New Zealand equities at ING New Zealand. “It is still a difficult environment to give guidance in with the current economic climate, and the themes we’re seeing from companies going forward are ‘caution’ and ‘uncertainty’.”

Mainfreight, New Zealand’s biggest trucking firm, rose 2.9% to $6.70 after it posted a 148% gain in first-quarter profit on the back of sales growth. Net profit rose to $6.8 million in the three months ended June 30, from $2.75 million a year earlier. The company stemmed losses American unit, which broke even, and said that business is being helped by continued strong sales growth. Freightways Ltd., the express package company, rose 1.7% to $2.92 helped pace gains.

APN News & Media Ltd., which publishes the NZ Herald and operates the Radio Network, rose 2.6% to $2.41 regaining some of the ground it lost yesterday.

Fisher & Paykel Appliances Ltd., the whiteware manufacturer, rose 1.9% to 52 cents, and takeover target NZ Farming Systems Ltd. rose 1.6% to 64 cents. Fletcher Buildings Ltd., the largest company on the exchange, rose 1.2% to $7.43.

Port of Tauranga Ltd., New Zealand’s largest export hub, rose 1.2% to $6.74 after the company reported its annual earnings met its guidance, and said rising volumes and cost controls will allow it to maintain profit growth through 2011. Underlying earnings rose 9.3% to $49.4 million in the 12 months ended June 30. Net profit for the year fell to $38 million from $45.1 million in the previous year after the company recognised an unrealised decline in the value of its deferred tax asset of $10.5 million due to changes to tax rules on depreciation, and $2.3 million relating to impairment on asset values.

Air New Zealand Ltd. rose 0.8% to $1.18 after the national airline announced it carried more passengers in July than in the same month of 2009, up 7.2% to 1.16 million, with the strongest growth coming from domestic routes and across the Tasman Sea.

Shares in ING Medical Properties Trust, the specialist investor in health clinics, were unchanged at 68 cents after the trust announced that it will lift its distributable profit 13% to $11.7 million as it boosted rental income and maintained a near-full occupancy rate. The stock gained 4.7% in value so far this year, and is the only listed property investor in the top 50 to do so.

Shares in Affco Ltd., New Zealand’s fourth largest meat processor and exporter, were unchanged after major shareholder Talley’s Group announced that it was lifting its offer price to match today’s market price of 38 cents.

AMP Ltd., the dual-listed Australian wealth manager, fell 4.8% to 6.40, leading declines on NZX, while shares on the ASX were last trading 4.1% down at A$5.10. The company had earlier reported a 4.4% increase in underlying earnings in the first half, to A$383 million in the six months ended June 30, but said it remains cautious about the global economic outlook. Net profit rose 17.4% to A$425 million.

Manufacturers paced declines on the NZX50, with crystal oscillator maker Rakon Ltd. falling 1.9% to $1.05, carpet maker Cavalier Corp. dropping 1.5% to $2.55 and F&P Healthcare Corp. declining 1.1% to 2.80.

Statistics New Zealand data showed manufacturers' margins were squeezed in the June quarter, according to the producer price index. Output prices rose 1.1% in the three months through June, lagging behind a 1.4% increase in input prices. Manufacturers have been in the doldrums as optimism about the economic recovery dimmed, with the latest Business NZ-BNZ leading indicator showing the sector shrank for the first time in 14 months in July.

Goodman Fielder Ltd., the Australasian food maker, fell 0.6% to $1.57 after the company posted an 8.3% decline in full-year profit, reflecting a decline in revenue and one-time charges for tax changes and costs of an asset sale blocked by regulators.

(BusinessDesk)

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