Market close: Strong company results give NZ sharemarket needed boost

The S&P/NZX 50 Index rose 1.54 per cent. Photo / NZME

Strong half-year financial results from heavyweights Fletcher Building and EBOS Group kicked the New Zealand sharemarket into life and stemmed four days of falls with a one and half per cent rise.

Fletcher Building and EBOS, both top 10 stocks, had strong gains, and they were joined by a bounce-back from market leader Fisher and Paykel Healthcare to drive the S&P/NZX 50 Index up 183.57 points or 1.54 per cent to 12,121.89.

There were 91 gainers and 45 decliners across the whole market, with 38.04 million shares worth $148.03 million changing hands.

Fletcher Building rose 41c or 6.53 per cent to $6.69 on trade worth $18.83m after reporting a 41 per cent increase in net profit to $171m on steady revenue of $4.064 billion for the six months ending December. Operating earnings (ebit) was up 3 per cent to $332m compared with the previous corresponding period.

Fletcher said it had a strong second quarter with ebit up 73 per cent to $264m and a margin of 11.8 per cent, and improved operational performance and cost disciplines were now embedded across the business. The Covid lockdowns on both sides of the Tasman affected ebit by $105m in the first quarter. Fletcher has increased its interim dividend 50 per cent to 18c a share, payable on April 7.

EBOS Group, which never disappoints, continues to grow, with net profit rising 15.8 per cent to $109.27m on revenue of $5.25b, up 12.8 per cent, for the six months ending December. Operating earnings (ebitda) increased 12.8 per cent to $207.7m and EBOS is paying an interim dividend of 47c a share on March 18. Its share rose $1.62 or 4.26 per cent to $39.64.

EBOS said it was reporting another record result on the back of particularly strong revenue growth in the Healthcare and Animal Care divisions, reinforcing the value of a diverse portfolio.

Matt Goodson, managing director of Salt Funds Management, said there were fears that Fletcher Building's result would be weaker because of the Covid restrictions, but it was decent and the second half looks to be strong.

He said EBOS has shown its ability to recoup inflationary pressures, particularly since animal health is a low margin business.

"It has been a good day for the market but whether it can hold it depends on the remainder of the reporting season," Goodson said. Next off the rank is another steady performer Skellerup Holdings.

The local market was also spurred by a big rebound on Wall Street, gladdened by the withdrawal of some Russian troops from the Ukraine border. The Dow Jones Industrial Average was up 1.22 per cent to 34,988.84; S&P 500 increased 1.58 per cent to 4471.07; and Nasdaq Composite rose 2.53 per cent to 14,139.76.

At home, Fisher and Paykel Healthcare rose 93c or 3.31 per cent to $29.04; Port of Tauranga climbed 38c or 6.2 per cent to $6.51; Freightways was up 16c to $12.16; and a2 Milk gained 12c or 2.18 per cent to $5.63.

Other stocks to recover were Pushpay Holdings, up 4c or 4.04 per cent to $1.03; Rakon increasing 5c or 2.86 per cent to $1.80; Steel & Tube gaining 3c or 1.94 per cent to $1.58; and Serko rising 11c or 2.17 per cent to $5.19.

Infratil was up 10c to $7.85; Napier Port gained 6c or 2.01 per cent to $3.05; South Port New Zealand increased 19c or 2.24 per cent to $8.69; Marlin Global fund rose 5c 3.68 per cent to $1.40; and Plexure Group collected 1.5c or 3.9 per cent to 40c.

Move Logistics was down 4c or 2.67 per cent to $1.46; NZME declined 3c or 2.4 per cent to $1.22; Vulcan Steel decreased 11c to $9.96; EROAD shed 8c or 1.86 per cent to $4.22; and hospitality group Savor fell 1.5c or 3.16 per cent to 46c.

Vista Group, up 3c to $2.08, has bought United States cinema software company Retriever Solutions for US$6.5m ($9.79m) though a mix of cash and shares. Vista told the market the deal will put management software into more than 200 new cinema sites and provide opportunities for its new Vista Cloud.

The board of Australian Apollo Tourism & Leisure is recommending the takeover by Tourism Holdings and the scheme of arrangement goes to the Queensland Supreme Court for approval on Friday. Tourism Holdings share price increased 2c to $2.72.

Transport and logistics software firm TradeWindow has been approved by New Zealand Customs Service for issuing certificates of origin for exporters sending goods and services to the Regional Comprehensive Economic Partnership, which comprises 11 Asian-Pacific countries. TradeWindow's share price gained 1c to $2.15.

NZX was up 2c to $1.74 after completing the purchase for the management rights of the ASB Superannuation Master Trust, which adds more than $1.8m in retirement savings from more than 17,500 members.