Market close: Calm before the storm as investors wait for reporting season to hot up

Rural services company PGG Wrighton declined 7c to $4.20 after reporting a 2.4 per cent increase in revenue to $975.69 million and a 27.9 per cent decrease in net profit to $17.51m for the year ending June.

The New Zealand sharemarket lacked any real impetus and traded flat as it waits for the local company reporting season to hot up.

The S&P/NZX 50 Index was weak in the morning but toughened up and closed at 11,820.74, down 5.68 points or 0.05 per cent, after reaching an intraday low of 11,772.85.

There were 56 gainers and 69 decliners over the whole market, with 32.54 million shares worth $102.67 million changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said it’s like the calm before the storm.

“The continuous disclosure obligations have dampened any surprises over earnings and it’s all about guidance and how the companies are thinking about the future,” he said.

Following a solid result from Contact Energy on Monday, other heavyweights Fletcher Building, Spark and Skellerup Holdings will be reporting this week, with a flurry of results for investors to digest next week.

Robertshawe said Spark had a weak first half and indicated it would pick up in the second half, and people are wondering how they will achieve this. “The company’s result will tell us.”

Major United States indices rebounded, with the S&P 500 up 0.58 per cent to 4489.72 points and the technology-driven Nasdaq Composite back on track with a 1.05 per cent rise to 13,788.33.

Investors there were waiting to see the July retail sales overnight and the latest earnings from the big retailers such as Home Depot, Target and Walmart.

The numbers will indicate the health of the US economy and how consumers are holding up amid cost-of-living and high-interest-rate pressures. Walmart, the world’s largest retailer, has been trading around record highs.

At home, there was further evidence that the housing market had bottomed. The REINZ house price index lifted 0.6 per cent in July with only three regions, Northland, Taranaki and Southland, having monthly price declines. Overall, sales fell 9 per cent.

ANZ Research said the price index came in a little stronger than expected but weaker sales suggest the dynamic may not last long.

“While we’re not characterising the housing market as strong, today’s data adds further confirmation that the cycle has turned,” ANZ said.

Property stocks, however, were weaker for the second day running. Argosy was down 2.5c or 2.09 per cent to $1.17; Investore declined 2c to $1.33; Kiwi gave up 1c to 92c; Precinct decreased 1c to $1.27; but Property for Industry was up 2.5c to $2.40.

Rural services company PGG Wrightson declined 7c to $4.20 after reporting a 2.4 per cent increase in revenue to $975.69m and a 27.9 per cent decrease in net profit to $17.51m for the year ending June. It is paying a final dividend of 10c a share on October 3.

Amongst the business units, retail and water provided revenue of $785.3m, up 3 per cent. Operating earnings (ebitda) was down 9 per cent to $61.2m.

PGG said it was too early to provide guidance for the 2024 financial year but maize orders were ahead of the same time last year and the viticulture sector had a good harvest. PGG has set an emissions reduction target of 30 per cent by 2030, from a 2021 baseline.

Amongst the retailers, Briscoe Group fell 21c or 4.47 per cent to $4.49, The Warehouse declined 5c or 2.84 per cent to $1.71; KMD Brands was down 2c or 2.25 per cent to 87c; and Michael Hill was up 1c to 98c.

Fisher & Paykel Healthcare was down 8c to $23.48 on trade worth $15m; Ebos Group declined 20c to $35.79; Freightways decreased 9c to $8.36; and Restaurant Brands shed 18c or 3.46 per cent to $5.02.

Move Logistics was down 3c or 3.61 per cent to 80c; Smartpay Holdings declined 3c or 1.84 per cent to $1.10; and Savor Group decreased 1.5c or 4.62 per cent to 31c.

Genesis Energy rebounded 6c or 2.38 per cent to $2.58 after being marked down on the news that it was being removed from the MSCI Small Cap Index. Other energy stocks Mercury was up 6c to $6.58, and Vector was down 3c to $4.03.

Heartland Group gained 3c or 1.74 per cent to $1.75 as housing market sentiment improves.

Napier Port was up 7c or 3.02 per cent to $2.39; SkyCity added 3c to $2.31; NZME gained 2c or 2.02 per cent to $1.01; and ikeGPS gained 2c or 2.82 per cent to 73c.

Ventia Services, down 4c to $3.10, has been awarded the next stage, in a deal worth $134m over the next two and a half years, to complete NBN Co’s fibre connect programme across Queensland, New South Wales, Victoria, Tasmania and Western Australia.

TruScreen, up 0.001c or 4 per cent to 2.6c, reported a 100 per cent rise in product sales and a 73 per cent increase in single-use sensors in the first quarter to June. Tru Screen said China continues to drive the growth in cervical screening and demand is returning to pre-Covid levels.

CDL Investments, unchanged at 74c, welcomed the Court of Appeal’s dismissal of a judicial review application by Winton Property Investments. Winton Land was unchanged at $2.42.