MARKET CLOSE: NZ shares fall; Goodman Fielder, Westpac drop

MARKET CLOSE: NZ shares fall; Goodman Fielder, Westpac drop on weak earnings

Feb. 16 (BusinessDesk) – New Zealand shares fell, led by foodmaker Goodman Fielder and Australian lender Westpac after they posted results that disappointed some investors. Michael Hill gained after lifting profit despite a struggle in Australia.

The NZX 50 Index fell 7.42 points, or 0.2 percent, to 3286.44. Within the index, 22 stocks fell, 17 rose and 11 were unchanged. Turnover was $89 million.

Goodman Fielder, which has brands including Vogel’s bread, declined 6.2 percent to 61 cents on the NZX after reporting a 77 percent slump in first-half profit and announcing it plans to sell assets including Integro and its New Zealand milling units. Chief executive Chris Delaney called the result “still unacceptable.”

Mark Lister of Craigs Investment Partners called it a “rubbish result."
"I can't see many bright spots and I think it’s fair it has fallen today," he said.

Westpac declined 2.8 percent to $26 on the NZX after the Sydney-based lender said its net interest margin contracted in the first quarter, reflecting higher funding costs and lower Treasury earnings, contributing to a 3.2 percent decline in cash earnings to A$1.5 billion, lagging behind the A$1.6 billion forecast in a Reuters survey.

Markets-related income fell by A$200 million in what chief executive Gail Kelly called a “more challenging operating environment.”

Australia & New Zealand Banking Group fell 0.8 percent to $27.45.

Michael Hill, the listed jewellery chain, rose 2.3 percent to 89 cents after posting an 11.5 percent increase in first-half sales as improved returns in New Zealand, Canada and the US made up for shrinking margins in Australia.

"It is going well in a sector finding it tough - it is good to see,” Lister said. Its areas of weakness had been expected. “Positive news coming from one retailer lifts the others. The retail sector is the stand out today."

Kathmandu, the outdoor equipment chain, rose 2.2 percent to $1.84 and Warehouse Group, the biggest retailer on the NZX 50, rose 2 percent to $2.55.

Hallenstein Glasson, the clothing chain, rose 1.3 percent to $3.81. Briscoe Group rose 0.7 percent to $1.46.

Heartland New Zealand, the lender which took on PGG Wrightson’s finance book last year, was unchanged at 48 cents. After the market close, the finance company reported a first-half profit of $9.8 million, meetings its guidance, and forecast a full-year profit of as much as $22 million.

Cavalier rose 4.2 percent to $1.98, clawing back some of the 17.4 percent shed yesterday, when the carpet maker said it was “extremely unlikely” to meet its full-year profit guidance of $8.5 million to $10.5 million. First-half earnings tumbled 59 percent.

AMP declined 0.4 percent to $5.53 on the NZX. Its full-year profit fell 11 percent to A$688 million due to the costs of taking over rival AXA and lower investment returns.

(BusinessDesk)

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