Market close: Property stocks dive after National swings axe on depreciation tax breaks

Kiwi Property Group, which owns Sylvia Park Mall, decreased 2.5c or 2.76 per cent to 88c.

The New Zealand sharemarket was flat and property stocks were weaker after the National Party followed Labour and confirmed commercial building depreciation tax breaks would end next year.

The S&P/NZX 50 Index had a choppy session on the day National announced its $14.6 billion tax plan and closed at 11,521.12, down 7 points or 0.06 per cent. The index reached an intraday low of 11,473.4 points and had a late flurry.

There were 69 gainers and 60 decliners over the whole market on volumes of 35.02 million shares transactions worth $128.18 million. Summerset Group, up 4c to $9.90, saw $20.82m worth of its shares change hands.

Greg Smith, head of retail for Devon Funds Management, said the National tax plan was net positive for NZ Inc and offered relief for those hit hardest by the cost-of-living crisis – Kiwi households.

“But property companies have been put on the back foot with the depreciation tax breaks ending – and that involves Auckland International Airport which has one of the biggest property portfolios in the country.”

Smith said the deluge of company results was all done and investors are taking stock and digesting all the information.

“The results didn’t shoot the lights out and those companies in line with expectation had a weaker reaction on the market. Mostly, there were conservative outlooks and those companies who were more upbeat, such as Tourism Holdings, benefitted,” he said.

Across the Tasman, the ASX had risen 1.19 per cent to 7296.5 points at 6pm NZ time as inflation in Australia continues to fall. The July consumer price index showed annual inflation at 4.9 per cent, down from 5.4 per cent in June. Annual price rises have eased from the peak of 8.4 per cent in December.

At home, the property sector fell 2.1 per cent on the NZX index. Argosy was down 3.5c or 2.92 per cent to $1.165; Kiwi decreased 2.5c or 2.76 per cent to 88c; Goodman Trust shed 5c or 2.25 per cent to $2.17; and Property for Industry declined 3c to $2.29.

Stride Property fell 3c or 2.11 per cent to $1.39; Investore was down 3c or 2.27 per cent to $1.29; Precinct declined 3.5c or 2.8 per cent to $1.215; and Vital Healthcare bucked the trend, gaining 2c to $2.27. Auckland International Airport declined 6c to $7.89.

Precinct Properties is offering $150m convertible notes in two series, with the ability to accept a further $50m in oversubscriptions to fund future projects.

These include a new 24,000sq m office building in Molesworth St Wellington, final building in Auckland Wynyard Quarter Innovation Precinct, and developing the Auckland Downtown Carpark site.

The country’s biggest kiwifruit grower Seeka fell 18c or 6.98 per cent to $2.40; Scott Technology was down 16c or 4.79 per cent to $3.18; Contact Energy decreased 7c to $8.36; and Accordant Group decreased 6c or 4.88 per cent to $1.17.

Fisher and Paykel Healthcare was up 14c to $22.41; Ebos Group gained 48c to $37.48; Manawa Energy surged 22c or 4.97 per cent to $4.65; a2 Milk added 7c to $5.12; and the leading banks ANZ and Westpac increased 71c or 2.65per cent to $27.50 and 34c to $23.55 respectively.

Restaurant Brands was up 15c or 3.33 per cent to $4.65; PGG Wrightson gained 12c or 3.02 per cent to $4.10; Pacific Edge increased 0.008c or 8 per cent to 10.8c; and Rua Bioscience improved 1.2c or 12.12 per cent to 11.1c.

Among the retailers The Warehouse gained 4c or 2.44 per cent to $1.68; KMD Brands was up 2c or 2.44 per cent to 84c; and Michael Hill collected 2c or 2.04 per cent to $1.

Hallenstein Glasson was up 3c to $6.02. The clothing retailer had earlier told the market sales for the year ending August 1 increased 16.7 per cent to $409.71m compared with the previous year and net profit is expected to be $31.8m-$32.3m, up 25.2 per cent.

Fletcher Building was unchanged at $4.91 as building consents continued to decline. Consents for new houses were down 25 per cent to 3058 in July compared with the same month last year, and the total consents for the past year were 43,487, down 14 per cent. Standalone house consents were down 23 per cent and multi-units 6.4 per cent over the past year.

Carpet maker Bremworth gained 3c or 7.5 per cent to 43c after reporting a 6 per cent drop in revenue to $89.7m and a 393 per cent increase in net profit to $11.03m for the year ending June.

Bremworth’s result was boosted by a $35.5m progress insurance payment for the Cyclone Gabrielle impact that closed the Napier facility. The cost of reinstating the facility is $112.7m-$162m and Bremworth is expecting significant further insurance payments.

Enprise Group, unchanged at 66c, reported a 10.7 per cent lift in revenue to $20.65m and a net loss of $11.93m for the year ending June. Enprise said the breach of BNZ banking covenants continues and the board will be seeking a further waiver. Enprise is making a one-for-five rights issue at 50c a share to raise $1.743m.

MHM Automation, down 1c to 99c, increased annual revenue 44 per cent to $97.83m and net profit 123 per cent to $3.96m, boosted by two months of trading from Wyma Engineering.