MARKET CLOSE: NZ shares fall after Mainfreight result

MARKET CLOSE: NZ shares fall after Mainfreight result misses estimates

Feb. 14 (BusinessDesk) – New Zealand shares fell, led by Mainfreight after the transport group posted quarterly earnings that missed some estimates. Air New Zealand and Freightways also declined.

The NZX 50 Index fell 9.69 points, or 0.3 percent, to 3330.33. Within the index, 28 stocks fell, nine rose and 13 were unchanged. Turnover was $97 million.

Mainfreight dropped 9.2 percent to $9.40 in the biggest one-day decline since April 2000 after the Auckland-based company said trading in the third quarter lagged its expectations. Third-quarter profit dropped to $17.7 million, from $18.1 million a year earlier, based on the company’s nine-month results. The biggest decline was in December.

"This is the first time in recent memory that they have let the market down but it’s all down to one month," Greg Easton, adviser at Craigs Investment Partners . “They really are an international company - most of the problems have been in Australia and Europe - so it won't affect the wider New Zealand market."

Among other transport companies, Freightways fell 2.9 percent to $3.65 and Air New Zealand dropped 2.8 percent to 87 cents.

Sky City Entertainment Group, the casino and hotel company, rose 3.1 percent to $3.64, the highest close since early August last year. The company is expected to lift sales by 4.5 percent and profit by 11 percent to $75 million when it posts its results tomorrow, according to Forsyth Barr.

“Sky City has steadily been climbing throughout the afternoon on anticipation of a good result," Easton said.

Fisher & Paykel Appliances rose 5.8 percent to 46 cents, leading gainers on the NZX 50 after the kiwi dollar dropped below 83 US cents. Manufacturing exporters tend to suffer when the currency is high as it erodes the value of overseas sales when they’re brought home.

Pyne Gould was unchanged at 36 cents after George Kerr’s Australasian Equity Partners No. 1 LP extended its takeover offer by a further two weeks and announcing his interest in the company now tops 65 percent. Kerr is offering 37 cents a share and said today his proposal is unconditional.

Opus International rose 2.7 percent to $1.92. The NZX-listed engineering consultancy posted an 11.5 percent gain in first-half profit, though half of the improvement was from a one-off tax credit for short-lived research and development tax credits.

Profit rose to $24.5 million in the six months ended Dec. 31, the company said. Sales gained 7.1 percent to $393.5 million.

Among the largest stocks on the bourse, Telecom gained 1.9 percent to $2.175 and Fletcher Building declined 0.2 percent to $6.71. Contact Energy fell 0.8 percent to $4.80.

Retailers were mixed. Pumpkin Patch, the children’s clothing chain, fell 5.9 percent to 80 cents. Kathmandu, which sells outdoor equipment, rose 1.7 percent to $1.83.

(BusinessDesk)

© Scoop Media