Market close: Ebos shares surge after delivering record profit

The New Zealand sharemarket was up 86.67 points or 0.75 per cent on the back of a strong day from Ebos.

Ebos Group, for so long a reliable and consistent performer, led the New Zealand sharemarket to a welcome gain of well over half a per cent on the busiest day for company reporting.

The S&P/NZX 50 Index gained new momentum at lunchtime and climbed to a close of 11,571.93, up 86.67 points or 0.75 per cent after reaching a morning low of 11,482.32. It was only the fourth, and biggest rise, in the past 17 trading days.

There were 83 gainers and 40 decliners over the whole market on volumes of 25.42 million share transactions worth $108.76 million.

Ebos dominated the trading with $21.34m worth of shares changing hands and its share price surged $2.05 or 6.02 per cent to $36.10 on another solid annual result.

Australasia’s largest distributor of health and animal care products, Ebos increased annual revenue by 14 per cent to $12.237 billion and underlying profit by 23 per cent to a record $281.82m.

Operating earnings (ebitda) were $582m, up 33.2 per cent, and Ebos is paying a final dividend of 57c a share on September 29, making the total annual payout $1.10, an increase of 14.6 per cent on the previous year.

The healthcare division’s ebitda was up 32.7 per cent and animal care 24 per cent. Ebos bought Paeroa-based Superior Pet Food Co, a supplier of premium dog rolls. No detailed 2024 guidance was provided but trading in July appeared to be solid.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said Ebos’ share price was extremely weak beforehand, but the company came out with a core result that showed organic growth and the integration of its big acquisition LifeHealthcare (medical technology) was going to plan.

Robertshawe said overall the company results so far were a fraction disappointing on analyst consensus. “But for fund managers like us, we thought things could be worse; there’s a quasi-relief move for a bunch of stocks.

“The Australian economy looks better than New Zealand’s and companies such as Ebos have strong businesses across the Tasman.”

Global marketer a2 Milk continued to rebound, up 18c or 3.73 per cent to $5.01; Briscoe Group gained 16c or 3.56 per cent to $4.65; Sky TV added 8c or 3.28 per cent to $2.52 on the eve of reporting its latest result; and Vital Healthcare Property Trust increased 7c or 3.17 per cent to $2.28.

Fisher and Paykel Healthcare added 15c to $22.59; Westpac gained 55c or 2.45 per cent to $23; Third Age Health Services was up 5c or 3.62 per cent to $1.43; CDL Investments increased 3c or 4.11 per cent to 76c; Restaurant Brands collected 7c to $4.47; and AFT Pharmaceuticals was up 8c or 2.27 per cent to $3.60.

Turners Automotive rose 16c or 4.51 per cent to $3.71 after telling the market it expects full-year net profit to be ahead of its record $45.5m for the 2023 financial year.

Turners said business has never been stronger and is on track to achieve a 10 per cent market share in used car sales, with 20 per cent of registered cars in New Zealand more than 20 years old. At the end of July 86,000 electric vehicles were of a total light vehicle fleet of 4.4m cars

Seeka was up 5c or 1.92 per cent to $2.65 after also telling the market that its full-year was on track to beat the record 2023 result. But Seeka’s half-year was impacted by a drop in kiwifruit yields, with Hayward Green down 30 per cent and SunGold down 22 per cent.

For the six months ending June, Seeka’s revenue was down 14 per cent to $212.67m, ebitda declined 26 per cent to $36.4m and net profit fell 55 per cent to $13.6m. It is not paying an interim dividend.

Precinct Properties, up 0.005c to $1.27, told the market that strong leasing and market rental growth – 13.8 per cent on new leases - resulted in net income of $102.1m, up 7.1 per cent.

The property company, however, had a net loss of $147.5m for the year ending June because of a $257.1m reduction in the value of its portfolio. Its net tangible asset per share is $1.38, down from $1.54 last year.

SkyCity, up 1c to $2.25, reported a 44.9 per cent surge in annual revenue to $926.2m and reported net profit of $8m from a loss of $41.6m in the previous year. SkyCity is paying a final dividend of 6c a share on September 22.

Operating earnings (ebitda) were $165.9m, up 71.1 per cent. SkyCity said it was a year of re-emerging performance and earnings were ahead of the 2019 financial year levels.

Amongst the decliners, Fonterra Shareholders’ Fund fell 13c or 4.02 per cent to $3.10; Fletcher Building was down 6c to $4.90; and Winton Land declined 8c or 3.1 per cent to $2.50.

Scales Corp, down 3c to $3.20, had steady revenue of $309.36m for the six months ending June, while net profit fell 43.5 per cent to $14.5m compared with the same period last year. Scales confirmed its full-year net profit guidance of $14m-$19m.

The global proteins division underpinned the result with operating earnings (ebitda) of $30.1m and horticulture fell from $24.5m to $11.4m because of the impact of Cyclone Gabrielle. Mr Apple’s own-grown export volumes are forecast at 2.7m tray cartons, compared with 3.3m last year.