Market close: NZ stocks tumble after a patchy start to New Year trade

The Warehouse's sales fell over the first quarter. Photo / NZME

The Warehouse Group took a tumble after providing a reduced sales and profit warning as the New Zealand sharemarket continued its patchy start to the year by falling more than half a per cent.

The S&P/NZX 50 Index fell steadily all day, only to make a recovery in the last half hour matching session. The index closed at 12,892.94, down 77.71 points or 0.6 per cent, after hitting an intraday low of 12,836.71 in the second week of trading for the new year.

There were 104 decliners and just 40 gainers across the whole market, and with many business executives and investors still on holiday volume was light with 24.8 million share transactions worth $116.69m.

The Warehouse Group, which also operates Noel Leeming, Warehouse Stationery and Torpedo7, slumped 46c or 11.47 per cent to $3.55 – its lowest level since mid-August last year.

The Warehouse reported after the market close on Friday that sales for the five months ending January 2 dropped 5.7 per cent of $88.8m to $1.466 billion compared with the previously corresponding period. Sales for the first two months of the second quarter were up 2.3 per cent.

The big retailer now expects net profit for the 2022 half-year to exceed $40m, compared with $111m for the same period in 2021 and $46.2m in 2020.

The Warehouse said the second quarter is expected to continue trading at or slightly above the same quarter last year, resulting in half-year sales to be down about $80m.

Matt Goodson, managing director of Salt Funds Management, said The Warehouse has just been through "the best of times for them" but this appears to be over.

A stand-out feature has been the shift to online sales particularly click and collect - which now make up 18 per cent of total sales - and profit margins are lower and freight costs higher.

"It sounds like The Warehouse is struggling to manage inventory levels given the shipping delays," said Goodson.

Among other retailers, Hallenstein Glasson fell 19c or 2.64 per cent to $7; Kathmandu Holdings decreased 4c or 2.67 per cent to $1.46; Briscoe Group gained 6c to $67.79; and Michael Hill International was up 2c to $1.53.

EBOS Group was down $1.65 or 3.98 per cent to $39.85 as its $105m retail offer to shareholders closed overnight.

Shareholders are being offered new shares at $34.50 a share as part of EBOS' overall capital raising of $780m to help fund the billion-dollar purchase of medical devices distributor LifeHealthcare.

Goodson said EBOS has been exceptionally strong lately and was upweighted in the NZX Index before Christmas. "I think some people all of a sudden realised the retail
offer was closing and decided to take some profit, though trading in the stock was very light."

Summerset Group, up 4c to $13.85, closed out last year with 121 new unit sales and 113 resales in the final quarter. This meant total sales last year reached a record 978, an increase of 25 per cent on 2020.

Summerset is developing four new sites in Auckland, Cambridge, Waikanae and Blenheim, as well as continuing construction on 13 other sites in New Zealand and at Cranbourne North in Melbourne.

Market leader Fisher and Paykel Healthcare was down 18c to $32.12; Mainfreight declined 60c to $93.20; Pushpay Holdings decreased 3c or 2.4 per cent to $1.22; and Mercury gave back 20c or 3.14 per cent to $6.16 after recent gains.

Meridian was down 6.5c to $4.62; Vulcan Steel, another recent performer, declined 31c or 2.83 per cent to $10.66; Delegat Group shed 15c to $14.15; T&G Global decreased 6c or 1.99 per cent to $2.95; and Investore Property lost 4c or 2.07 per cent to $1.89.

The travel and leisure stocks were weak. Tourism Holdings fell 14c or 4.55 per cent to $2.94; Serko was down 20c or 2.99 per cent to $6.50; Sky Network Television declined 25c or 9.3 per cent to $2.46; and SkyCity Entertainment decreased 3c to $2.98.

Restaurant Brands was up 25c or 1.79 per cent to $14.25; a2 Milk gained 9c to $5.85; Sanford collected 13c or 2.67 per cent to $4.99; Bremworth rose 6.7c or 8.45 per cent to 77c; EROAD picked up 7c to $4.95; and new listing Trade Window climbed another 10c or 3.73 per cent to $2.78.

Medicinal cannabis firm Greenfern Industries was down 0.005c or 2.17 per cent to 22.5c after reaching a $900,000 distribution agreement with Cannvalate Pty, which will develop Greenfern's sales in Australia.