Continuous Disclosure: Will company results reveal a pass mark or a black mark?

Fisher Funds senior portfolio manager Sam Dickie said Contact Energy, Fletcher Building and Mainfreight were the best of the bunch so far. Photo / Supplied

Results season is a chance for investors to run the ruler over the financial figures of New Zealand's listed companies and decide if they deserve a pass mark or a black mark.

"It is a real litmus test into how the company is tracking," says Fisher Funds senior portfolio manager Sam Dickie in the latest episode of NZ Herald podcast Continuous Disclosure.

But while the results themselves are interesting, they are backward-looking because they are delivered six to eight weeks after the end of the financial cut-off period.

"What's really interesting is the trading update and the outlook statements from the companies."

New Zealand is about halfway through its June 30 balance date reporting season but Dickie said so far largely the less-controversial companies like the power generators and property companies had reported.

Air New Zealand and A2 Milk are still to come.

Of those who have opened the books, Dickie said, Contact Energy, Fletcher Building and Mainfreight were the best of the bunch.

"Fletcher delivered a solid result relative to expectations and that has been a thematic of the earnings season. If you had asked me a year ago how was the results season I would probably say not great. But today given we have gone through a period of fairly heavy fear relative to beaten-down expectations... not bad."

Fletcher Building's forward book was expected to be dragged down by the weak housing market but ended up a lot better than expected because it still has a lot of backlog.

Dickie said that was partly due to an aftershock of Covid.

"Building companies, as we know, couldn't get enough product, couldn't get enough people and that's caused an elongation and a pipeline of work."

Meanwhile a trading update from Mainfreight showed its profit growth had accelerated from 30-odd per cent to 50 per cent from the end of its financial reporting period.

"That's a cyclical company and everybody has been expecting a slow-down. So that was a really surprising beat on the upside."

Conversely, Dickie said a few companies had been surprisingly weak or as weak as expected.

Those included Auckland Airport and Freightways.

Dickie said air travel had rebounded off a low base - it's about 50 per cent of where it was pre-Covid - but European airports were about 80-90 per cent of where they were pre-Covid.

"But the company gave quite a subdued traffic outlook."

While there was pent-up demand for travel it was also being blunted by high ticket prices.

Freightways had pricing power as it was one of only two players in New Zealand and it had been able to put up prices by around 6 per cent but its trading update post balance date was disappointing, Dickie said.

Cyclical stocks like Fletcher Building, Summerset, Freightways and Mainfreight had been a mixed bag.

Defensive companies had had predictable earnings.

Continuous Disclosure is available on iHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts. New episodes come out every second Wednesday and it is brought to you with support from Fisher Funds.

You can find more New Zealand Herald podcasts at nzherald.co.nz/podcasts or on iHeartRadio.