Market close: Strong start to annual results fails to lift NZ sharemarket

Property companies Precinct and Vital Healthcare produced strong annual results, but for the second day running the New Zealand sharemarket was driven down by a sharp fall in heavyweight Fisher and Paykel Healthcare.

The S&P/NZX 50 Index shed 66.25 points or 0.52 per cent to 12,681.81, after falling in the afternoon from an intraday high of 12,760.53.

There were 62 gainers and 75 decliners over the whole market, and volumes were again boosted by movements in passive investment funds.

A total of 122.41 million shares worth $267.16 million changed hands, with 31.35 million units worth $41.68m in Smartshares Global Aggregate Bond Exchange Traded Fund (ETF); 6.8 million units worth $21m in NZ Bond ETF; and 9.1 million units worth $21.8m in NZ Government Bond ETF.

Matt Goodson, managing director of Salts Fund Management, said the market was mixed and led down by Fisher and Paykel Healthcare, which has been weak over the past two days.

“The only thing I can connect this with is the result from an American medical devices company Vapotherm which suggested sales looking forward were falling away quicker than expected.

“What is clear is that the passive funds have become active and moving stocks around on light volumes,” Goodson said.

Market leader Fisher and Paykel Healthcare declined 90c or 2.83 per cent to $30.90 on trade worth $26.16m, a fall of more than 6 per cent in two days from $32.95.

Precinct Properties was up 2.5c to $1.68 and Vital Healthcare Property Trust rose 6c or 1.89 per cent to $3.24 after revealing steep increases in profit for their 2021 financial years ending June.

Precinct Properties, which has managed $1.5 billion worth of development projects over the past six years, reported a 412 per cent increase in profit from $35.1m in 2020 to $179.9m, thanks to a portfolio revaluation gain of $282.9m.

Its revenue was up 31.6 per cent to $199.8m and net asset value settled at $1.52 a share. Precinct is paying 2022 dividend of 6.7c a share.

Goodson said Precinct has done a good job positioning itself at the premium end of the office market and missing some of the vacancies occurring in Auckland.

Vital Healthcare Property Trust, with a portfolio of 41 properties worth $2.63b, increased its gross profit 352.9 per cent to $318.48 on the back of a revaluation gain of $235m.

Its net property income was up 9.5 per cent to $109.66m and net tangible asset was $2.89 a share, an increase of 21.4 per cent. Adjusted funds from operations rose 10.4 per cent from 10.45c a unit to 11.54c, it is paying an increased 2022 dividend of 9.5c a unit, and Vital has $312m worth of developments committed.

A re-organised AMP provided an improved first half of the 2021 financial and rose 6c or 5.36 per cent to $1.18. Operating earnings were up 57 per cent to $181m, from $115m in the previous corresponding six months, and revenue fell slightly to $1.70 billion, from $1.724 billion. Net profit was $146m compared with the previous $203m.

Auckland International Airport was up 7c to $7.23; Chorus increased 9c to $6.38; Ryman Healthcare rose 20c to $13.71; Hallenstein Glasson gained 16c or 2.31 per cent to $7.10; PGG Wrightson picked up 7c or 2.04 per cent to $3.50; and Restaurant Brands was up 27c to $15.72.

Scott Technology climbed 14c or 4.84 per cent to $3.03; Cavalier collected 4c or 7.14 per cent to 60c; Rua Bioscience picked up 1.5c or 3.7 per cent to 42c; and Enprise Group added another 45c or 20 per cent to $2.70.

Amongst the decliners, Pushpay Holdings was down 4c or 2.4 per cent to $1.63; Freightways declined 19c to $3; Briscoe Group fell 8c to $6.30; Infratil lost 11c to $7.40; Serko shed 9c to $6.815; and Comvita lost 8c or 2.39 per cent to $3.27.

Contact Energy told the market it is supplying Genesis with renewable electricity for 15 years from 2025. Genesis will take up to 62.5 megawatts (MW) of electricity, representing 41 per cent of the capacity, from Contact’s new geothermal power station at Tauhara near Taupō.

Genesis is also finalising a joint venture to deliver up to 500 MW of solar capacity, enough to power 100,000 households or 185,000 electric vehicles a year – as part of its renewable generation programme.

Genesis was unchanged at $3.39; Contact was down 3c to $8.17; Meridian declined 6.5c to $5.175; Mercury fell 18c or 2.61 per cent to $6.715; and Trustpower was up 7c to $8.12.

On Wall Street overnight, the Dow Jones Industrial Average and S&P 500 Index both hits new highs, rising 0.62 per cent to 35,484.97, and 0.25 per cent to 4447.70 respectively, as latest inflation was not as high as expected.

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