Market close: Sky TV stands out in quiet day for sharemarket

Sky Network Television burst into life by significantly increasing its financial forecasts on another quiet day on the New Zealand sharemarket.

The S&P/NZX 50 Index reached a lunchtime high of 12,678.84 but then started falling and finished 12.07 points or 0.1 per cent ahead at 12,609.88.

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  • Sky TV shares jump as profit guidance hiked

There were 86 gainers and 60 decliners over the whole market on volume of 49.63 million share transactions worth $182.74 million.

The market was led down by Fisher and Paykel Healthcare, falling 42c to $31.86 on trade worth $20.7m, followed by Ryman Healthcare, declining 33c or 2.7 per cent to $11.87 – its lowest level this year.

Matt Goodson, managing director of Salt Funds Management, said Fisher and Paykel has turned into a Omicron Covid play. “When the next snippet of Covid news comes out, Fisher and Paykel’s share price promptly changes tack.

“Its latest fall appears to be based on views that Omicron hasn’t caused increased hospitalisations. Fisher and Paykel is gyrating in the $30-$35 range based on the emerging new data.”

He said Ryman Healthcare has been under pressure since it didn’t recommit to its new build rate when it reported its half-year result last month.

“Ryman has lost some of valuation premium, but so has the rest of the retirement village sector. I think the market is teasing out whether house prices have peaked. Mortgage rates are rising, listings are starting to lift and auction sales rates are starting to fall.

“The retirement village sector is closely aligned with the housing market, and people are waiting to see if they can lift resale prices and recycle formerly occupied units,” Goodson said.

Among other retirement village stocks, Summerset Group Holdings was up 13c to $13.03; Oceania Healthcare gained 2c to $1.32; and Arvida was down 1c to $1.95.

Sky Network Television put on its own show. The pay television operator rose 31c or 17.71 per cent to $2.06 after upgrading its 2022 earnings because of “a rigorous cost review”.

Sky TV is making additional savings of $40m-$45m in its present financial year and though revenue will remain steady at $725m-$745m, its operating earnings and net profit will surge.

Operating earnings (ebitda) is now forecast at $150m-$160m, from $115m-$130m and a midpoint increase of 17 per cent. Net profit is now expected to be $40m-$48m, from $175m to $27.5m and midpoint rise of 96 per cent.

Sky TV, which had fallen out of favour with investors, made a 10 for one share consolidation in mid-September and reached an intra-day high of $2.11, close to its two-year high of $2.15 after falling as low as $1.008 on March 23 last year.

Goodson said the new management has a done a good job at stripping back costs and freeing up significant cash flow. “The bears will still argue that pay television is yesterday’s generation; the new generation just isn’t signing up.”

Two reopening stocks displayed renewed life, with Air New Zealand up 4.5c or 3.01 per cent to $1.54; and SkyCity Entertainment rising 10c or 3.31 per cent to $3.12.

The leading banks ANZ Banking Group rose 76c or 2.72 per cent to $28.70, and Westpac Banking Corporation was up 33c to $21.95.

The energy stocks were mixed. Meridian was up 8c to $4.67; Trustpower increased 8c to $7.39; but Mercury was down 5c to $5.85; and Vector declined 4c to $4.02.

Infratil rebounded 10c to $8.05; a2 Milk was up 11c or 1.93 per cent to $5.80; Synlait increased 4c to $3.43; Chorus gained 5c to $6.81; Port of Tauranga collected 8c to $6.86; and Serko picked up 12c or 1.9 per cent to $6.45.

Vulcan Steel climbed another 12c to $8.97; Scott Technology rose 11c or 3.07 per cent to $3.69; Rakon picked up 5c or 2.79 per cent to $1.84; and Michael Hill International increased 4c or 3.51 per cent to $1.18.

Other port companies Marsden Maritime Holdings was down 5c to $6.40, and Napier Port also declined 5c to $3.05.

Move Logistics fell 7c or 4.12 per cent to $1.63; DGL Group declined 10c or 3.89 per cent to $2.47; and medicinal cannabis firm Greenfern Industries decreased 1.5c or 6.25 per cent to 22.5c

Wine exporter Delegat Group has renewed its $333m funding facilities with four banks, Westpac, BNZ, HSCB and China Construction Bank (NZ), and its share price declined 5c to $13.90.

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