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New Zealand shares fell again, led lower by Tegel Group Holdings which cut its guidance, Orion Health Group and Sky Network Television.
The S&P/NZX50 Index dropped 49.24 points, or 0.7 per cent, to 6,748.62. Within the index, 35 stocks fell, 13 rose and three were unchanged. Turnover was $156.9 million.
Tegel Group Holdings was the worst performer, down 16.8 per cent to $1.29, a record low. The poultry group, which was taken public by private equity firm Affinity Equity Partners in April, posted a 4 per cent decline in first-half earnings as margins were squeezed by a glut of chicken keeping domestic prices low. Tegel expects annual underlying ebitda of between $75m and $85m, having previously projected proforma earnings of $84m for the 2017 year.
"They well and truly missed expectations and gave guidance well below the product disclosure statement document so they've been thumped," said Rickey Ward, NZ equity manager at JBWere. "You miss PDS numbers, markets never take kindly to that and they've been rapped across the knuckles as a result. Their guidance was predicated on no deterioration in the current environment, so one would assume that's a big ask given you've got a bit of an oversupply led from around the world."
A product disclosure statement gives investors essential information to help them decide whether to invest their money in a stock, bond or other financial product.
Sky Network Television dropped 4.2 per cent to $4.10. It was the worst performer on the index yesterday after cutting its 2017 earnings guidance citing rising content costs, and falling revenue and subscribers.
"With the demise of the likes of Pumpkin Patch and Wynyard and further signs earnings may not be coming through to expectations we all had, people are putting the ruler across a whole lot of names that are more growth-oriented ...," Ward said. "Intueri always rated really high on that front, Orion Health, lots of those sorts of companies have people reassessing what they're actually investing in. It doesn't mean they're making good or bad decisions but they are reassessing them."
Orion Health Group fell 7 per cent to $2 while Intueri Education dropped 10 per cent to 2.7 cents. Yesterday, Orion said it had signed an expanded agreement with an American client.
"Orion's commentary yesterday was very similar to the sort Wynyard used to provide, very marketing oriented without any financial detail attached," Ward said. "They win a contract, but not detail, so how do you value that? The share price rallied a little bit on the back of it but that's what got Wynyard - positive announcements, no detail, all of a sudden people got told they were in trouble. There's a lot more nervousness out there at the moment."
A2 Milk Co continued to decline, down 2.4 per cent to $2.08. It began declining on Monday on the news that Australian formula producer Bellamy's had gone into a trading halt on the ASX.
Freightways gained 2.9 per cent to $6.84, Auckland International Airport rose 2.3 per cent to $6.30, and Kathmandu Holdings advanced 1.6 per cent to $1.92.
Restaurant Brands New Zealand rose 0.6 percent to $5.14. The fast-food retailer lifted sales 35 per cent in the third quarter, with most of the increase coming from the 42 Australian KFC stores the company bought in April.
Outside the benchmark index, Veritas Investments dropped 9.1 per cent to 20 cents. It will wind up its unprofitable Nosh supermarket business to keep in the good graces of its lender, ANZ Bank New Zealand. It will either sell or close the business by March 31. The shares were halted before trading opened yesterday at 22 cents, and Veritas released the statement after the market closed.
Pushpay Holdings gained 3.1 per cent to $1.33. The mobile payments app developer says it has nothing material to tell the market and thinks its shares are undervalued, after its share price dropped 27 per cent this month, triggering a price enquiry from the NZX. NZX sent the 'please explain' note after the shares dropped from $1.78 on November 30 to $1.30 at 3:50pm yesterday.