Market close: Comvita shares plunge after earnings downgrade

Comvita declined 34c or 11.49 per cent to $2.62 after downgrading its earnings guidance because of slowing sales in China and the United States. Photo / NZME

Comvita fell more than 11 per cent on an earnings downgrade and the New Zealand sharemarket dropped a half per cent ahead of the Reserve Bank’s latest monetary policy statement.

The S&P/NZX 50 Index declined 55.42 points or 0.49 per cent to 11,155.79 with a sharp fall in the last hour of trading, after reaching an intraday high of 11,218.02.

There were 34 gainers and 96 decliners on the main board with 20.59 million shares worth $81.69 million changing hands.

David McConnochie, investment adviser with Forsyth Barr, said the market was soft and waiting on the Reserve Bank news. “Some people are getting excited about interest rate cuts, but I suspect the bank will still be pretty dovish and the rate will stay at present levels for longer.”

The Wednesday monetary policy statement is expected to keep the Official Cash Rate on hold at 5.5 per cent as inflation continues to ease. The October Australia consumer price index will be released the same day, giving an indication of where inflation is at.

Natural health products supplier Comvita declined 34c or 11.49 per cent to $2.62 after downgrading its earnings guidance because of slowing sales in China and the United States, particularly with mānuka honey.

Comvita told the market that revenue for the first four months of the 2024 financial year was down 10 per cent compared with the previous corresponding period and operating earnings (ebitda) were $6m behind.

Comvita expected half-year revenue to be down 5 per cent and ebitda to fall 20 per cent. For the full year, Comvita is forecasting revenue of $245m-$255m (last year $234m) after investment of $33m-$38m, and is maintaining its 2025 ebitda target of $50m.

McConnochie said there is weaker consumer sentiment globally and consumer stocks are under pressure to maintain earnings guidance. “Comvita’s trading had improved in November, but perhaps its end-of-year goals are a little harder to achieve.”

Fisher and Paykel Healthcare decreased 23c to $22.05; Mainfreight was down 90c to $66; Infratil declined 17.5c to $9.880; ANZ Bank fell 51c or 1.9 per cent to $26.33; and Heartland Group decreased 3c or 1.8 per cent to $1.64;

Serko fell 14c or 3.19 per cent to $4.25; Scott Technology shed 11c or 3.15 per cent to $3.38; Michael Hill was down 2c or 2.3 per cent to 85c; PGG Wrightson declined 13c or 3.71 per cent to $3.37; and T&G Global gave up 5c or 2.63 per cent to $1.85.

In the energy sector, Meridian gained 10c or 1.96 per cent to $5.21, and Vector was down 9c or 2.41 per cent to $3.65.

In the property sector, Stride was up 3c or 2.31 per cent to $1.33, and Goodman Trust was down 4c or 1.86 per cent to $2.105.

Kiwi Property gained 2c or 2.38 per cent to 86c after reporting a 16.2 per cent drop in net rental income to $89.1m for the six months ending September.

The property company sold $127m of assets and sales across its mixed use and retail centres including Sylvia Park grew 14.9 per cent to $2.1 billion for the year ending September. Kiwi had a net loss of $36.54m, mainly because of a $81.1m reduction in the value of its portfolio.

NZME added 2c or 2.27 per cent to 90c; Burger Fuel increased 4c or 15.38 per cent to 30c; and NZ Oil & Gas gained 1.5c or 4 per cent to 39c on the new coalition Government pledge to re-open exploration.

Smartpay Holdings was down 8c or 5.18 per cent to $1.465 after reporting a 32.52 per cent increase in half-year revenue to $46.9m and 17.12 per cent decline in net profit to $2.63m. Operating earnings (ebitda) were $10.64m, up 42 per cent.

Radius Residential Care, down 0.002c to 14.3c, reported a 20.9 per cent increase in half-year revenue to $84.47m and a 17.7 per cent fall in net profit to $1.42m. Underlying operating earnings (ebitda) were $10.5m, up 50 per cent.