Market close: Fletcher, Ebos propel NZ sharemarket

Fletcher Building increased 20c or 2.99 per cent to $6.90 on heavy trade worth $32.71m. Photo / Supplied

Fletcher Building and Ebos Group set the tone for a solid earnings reporting season and continued to propel the New Zealand sharemarket, this time posting a 1 per cent gain.

For the second day running the S&P/NZX 50 Index traded in positive territory, gaining 134.92 points or 1.11 per cent to 12,256.82. The index has risen 2.65 per cent in two days.

There were 74 gainers and 51 decliners across the whole market on volumes of 33.13 million share transactions worth $146.78 million.

After reporting strong half-year results the day before, Fletcher Building and EBOS Group went higher. Fletcher increased 20c or 2.99 per cent to $6.90 on heavy trade worth $32.71m and Ebos rose $1.70 or 4.33 per cent to $41.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the blue-chip companies like Fletcher and Ebos are producing robust earnings and outlooks, and the financial results are giving investors confidence.

"The reporting season has come at a good time after a pretty bad January and maybe the worst of the correction is over as the economy is still relatively strong," said Sullivan. "Next week is a busy one with results and there's plenty to look forward to."

Brokers have now re-rated Fletcher Building with an average target share price of $8 over a wide range of $7.70 to $9. Sullivan said Fletcher seems a different beast these days after having a hard time with its materials division.

Skellerup Holdings reported record net profit of $23.21m, up 19 per cent, on increased revenue of $150.47m for the six months ending December, but its share price declined 9c to $6.21. Operating earnings (ebit) increased 18 per cent to $32.4m, and its full-year net profit guidance was $44m-$47m.

Skellerup achieved record results for its agri (ebit up 9 per cent to $16.7m) and industrial (ebit up 20 per cent to $18.7m) divisions with growth strongest in United States, New Zealand and Asian markets. It is paying an interim dividend of 7.5c a share on March 17.

The retirement village stocks made a recovery, with Oceania Healthcare up 4c or 3.7 per cent to $1.12; Ryman gaining 25c or 2.67 per cent to $9.60; and Summerset Group Holdings increasing 12c to $11.45.

Infratil gained another 21c or 2.68 per cent to $8.06; Freightways increased 18c to $12.35; a2 Milk was up 8c to $5.74; Genesis Energy collected 7.5c or 2.71 per cent to $2.845; Serko rose 33c or 6.47 per cent to $5.43; and Steel & Tube was up 4c or 2.58 per cent to $1.59.

New Zealand Refining improved 4c or 4.26 per cent to 98c; Scott Technology increased 11c or 3.37 per cent to $3.37; My Food Bag rose 3c or 2.86 per cent to $1.09; and Gentrack gained 5c or 3.03 per cent to $1.170.

Livestock Improvement Corporation collected 5c or 3.57 per cent to $1.45; TradeWindow was up 7c or 3.24 per cent to $2.23; and Solution Dynamics increased 5c or 1.89 per cent to $2.70.

DGL Group, up 5c to $3.09, has made another purchase, this time Melbourne-based Australian Logistics Management (ALM) for $1.25m through cash and shares. DGL is also paying $2.4m for a licenced property currently leased by ALM.

Hallenstein Glasson fell 29c or 4.33 per cent to $6.40 after telling the market that group sales for the six months ending January were down 6.2 per cent to $170.6m compared with the previous corresponding period. The transtasman clothing retailer lost 5432 trading days due to the Covid-19 restrictions. Group net profit is forecast at $11.1m-$12.1m, down from $19.8m in the prior year.

NZX went into a trading halt while it raised $44m – $12.5m of it will be used take a 33 per cent stake in Global Dairy Trade along with Fonterra and European Energy Exchange. The partnership is expected to be completed by the middle of the year.

NZX reported a 12.2 per increase in full-year revenue to $87.95m, with net profit down 14.6 per cent to $15.01m and operating earnings (ebitda) up 4 per cent to $34.4m. Ebitda guidance for the 2022 financial year is $33.5m-$38m. NZX is paying a final dividend of 3.1c a share on March and it last traded at $1.73.

Investore Property gained 2c to $1.78. Specialising in bulk retail buildings, Investore is making a five-year, $75m fixed-rate bond offer, with the ability to accept over-subscriptions of $50m.

Probiotic manufacturer Blis Technologies increased 0.002c or 4.76 per cent to 4.4c. In a recent trading update, Blis reported revenue of $2.3m for the third quarter ending December and an operating earnings (ebitda) loss of $400,000. Blis confirmed its full-year revenue guidance of $8.6m-$9-1m and ebitda loss of $2.3m-$2.7m.