Market close: NZ market flattens out as KMD Brands falls almost 5pc

The S&P/NZX 50 Index fell 19.7 points, or 0.2 per cent, to 11,324.82.

New Zealand’s benchmark share index dipped slightly as investors waited to hear what the US Federal Reserve said after its two-day meeting came to an end early on Thursday morning (NZ time).

Closer to home, outdoor and sports retailer KMD Brands told the market that group sales jumped 12.6 per cent to $1.1 billion – up from $979.8 million a year earlier – and the stock fell almost 5 per cent in response to a weaker outlook.

The S&P/NZX 50 Index fell 19.7 points, or 0.2 per cent, to 11,324.82. Turnover was $105.2m. There were 57 gainers and 74 decliners on the main board.

‘Hawkish stance’

CMC Markets analyst Tina Teng said Wall Street had fallen for a third straight trading day ahead of the Fed rate decision. “Markets are pricing in the hawkish stance of the Fed, despite a widely expected rate hike pause,” she said.

On the stock front, KMD Brands reported more than $1b in group sales in the 12 months ending July 31, reaching a new record for the outdoor and sports retailer in its first year of “uninterrupted trade” post-pandemic.

Chief executive and managing director Michael Daly said strong sales growth had been delivered across all “key” geographies.

“Customers returned to shopping in stores, with retail store sales increasing 17.5 per cent,” he told the market.

“This had an impact on online sales, a trend noted across the industry as customers returned to pre-pandemic shopping behaviours.”

Underlying net profit after tax came to $43.3m – up 8.6 per cent from $39.8m in the previous corresponding period. KMD Brand’s share price slipped down the board throughout the day, ending on Wednesday down 4 cents or 4.9 per cent to 78 cents.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said KMD’s result was a reasonable one on the face of it, but the market was “really focusing” on the retailer’s softer fourth quarter, as well as the weaker start to the 2024 financial year. “The market’s always looking forward,” he told BusinessDesk.

“There’s just not enough in that result to get the buyers coming out.”

Going in the opposite direction, Hallenstein Glasson Holdings jumped 26 cents or 4.5 per cent to $6. The Warehouse, which reports its full-year results next week, was down 4 cents or 2.4 per cent to $1.63.

Briscoe and Fonterra

Briscoe Group edged down 4 cents or 0.9 per cent to $4.52, as did Michael Hill, which fell 4 cents or 4 per cent to 95 cents.

Dairy prices improved in the latest Global Dairy Trade auction, driven by a 4.6 per cent increase in whole milk powder prices to US$2799 (NZ$4717) per metric tonne.

“The recent plunge in prices and concerns about dairy production, as we head into El Nino weather conditions, have seen buyers return to the market,” BNZ senior markets strategist Jason Wong said.

Dairy giant Fonterra reports its full-year earnings on Thursday. Fonterra Shareholders’ Fund Units were up 6 cents or 1.9 per cent to $3.29 by the end of day trading. The co-op told the market in August that it expected to end the 2023 financial year at the “top end” of its forecast range of 65-80 cents per share.

Fonterra also plans to pay a full-year dividend at the top end of its dividend policy of 40 to 60 per cent of normalised earnings.

Today, a2 Milk fell 10 cents or 2.1 per cent to $4.63, while Synlait Milk edged up 3 cents or 2.5 per cent to $1.24.

NZ King Salmon reports its half-year result on Thursday. At the salmon company’s full-year results back in March, the firm said it had booked a $1.9m net profit for the year ended January after the previous year’s $73.2m loss. The shares were down 1 cent or 5 per cent to 19 cents today, but on less than $1,000 value traded.

Davies said shareholders would be waiting on the regulatory approval NZ King Salmon needs to move their operations further out to sea. “In the interim, obviously, it’d be good for their shareholders to see a bit of sales growth there,” he said.

F&P Healthcare

Channel Infrastructure was down 2 cents or 1.2 per cent to $1.59 after telling the market it had expanded its jet fuel storage at the former Marsden Point refinery, adding 45 million litres.

This development is part of a $45-50m project to increase capacity by 100 million litres. Cancer diagnostics firm Pacific Edge jumped up 1.2 cents or 9.7 per cent to 13.6 cents.

Davies said the company’s share price had risen 35 per cent in the last week and a half alone. Healthcare wholesaler Fisher & Paykel was down 17 cents or 0.8 per cent to $21.74.

Wealth management firm Forsyth Barr upgraded its underperform rating of Fisher & Paykel Healthcare to neutral due to a weakening NZD/USD and the company’s defensive qualities in an uncertain market.

Radius Residential Healthcare announced the sale of its Arran Court facility in Te Atatū, Auckland for approximately $19m. The sale is conditional on ASB approval and the purchaser completing due diligence and obtaining finance and regulatory approvals by November 30.

The stock was flat at 17.5 cents per share by the end of Wednesday.

Ryman Healthcare fell 12 cents or 1.8 per cent to $6.45, as did Summerset Holdings, which was down 5 cents or 0.5 per cent to $9.75. Oceania Healthcare was up 1 cent or 1.3 per cent to 76 cents. Investore Property rose 7 cents or 5.8 per cent to $1.28, and Stride Property jumped 8 cents or 6.4 per cent to $1.34. Fletcher Building was up 17 cents or 3.7 per cent to $4.71.

The NZ dollar was trading at 59.43 US cents at 3pm in Wellington, up from 59.16 on Friday. The trade-weighted index was at 70.12, from 69.82 yesterday.