MARKET CLOSE: NZ shares rise, led by Coats; Nuplex gains on dividend lift

Friday 22nd May 2015

New Zealand shares rose, led by Coats Group after it said earnings were on track. Nuplex Industries advanced after it flagged it would lift its dividend payments.

The NZX 50 Index rose 6.752 points, or 3.6 percent, to 5776.017. Within the index, 26 stocks rose, 19 fell and five were unchanged. Turnover was $128 million.

Coats led the benchmark index higher, advancing 3.6 percent to 57 cents after the UK threadmaker, once part of the Guinness Peat Group empire, said sales growth has been in line with management's expectations in the first four months of the year, and affirmed its forecast for stable operating profit in 2015.

Nuplex rose 2.2 percent to $3.76. The specialty chemical and resin maker expects to declare a final dividend of 17 cents, taking its total payment to 27 cents this year, up from 21 cents in 2014, and it lifted its payout ratio to 60 percent of profit. It has been cutting back operations in Australia and New Zealand, where a weaker performance is weighing on growth in Asia, America and Europe.

"It's a good sign, it's a good vote of confidence from the board and management team," said Shane Solly, director at Harbour Asset Management. "It can be a pretty challenging space they're in in terms of sectors so in the near future they've got the confidence to push that through."

Ryman Healthcare declined 1 percent to $7.98. New Zealand's largest listed retirement village builder and operator posted a 24 percent gain in annual profit to $241.9 million as the value of its properties increased and revenue rose. It has been developing new villages as it seeks to benefit from ageing populations and said work is beginning on its second village in Melbourne and it expects to have five villages open in Melbourne by 2020.

"There's one or two who were perhaps expecting a bit more than that," Solly said. "But the one thing we know is that they've consistently delivered pretty on expectations."

Spark New Zealand, formerly Telecom Corp, fell 1.6 percent to $2.73, its lowest level since July. The arrival of ASX-listed M2 Group, the voice and data services company, in the local market, after it agreed to buy New Zealand's CallPlus, the country's third-biggest broadband and telecommunications services company, had investors worrying about increased competition, Solly said.

Meridian Energy climbed 3.3 percent to $2.34. The state-controlled power retailer and generator was sold off as investors looked to raise cash to pay for its second installment receipt which came due this month. When Meridian listed on the NZX in October 2013, the shares were offered in a two-payment instalment receipt process to sweeten the offer for small investors, with $1 upfront and the promise of full entitlement to dividends, and the remaining 50 cents due earlier this month.

Sky Network Television, the country's dominant pay-tv provider, rose 3.1 percent to $6.41. The company has a big investor day next week, Solly said, and investors were anticipating positive news from it.

Kiwi Property Group, the property investor, was the worst performer on the day, down 2.9 percent to $1.24.

Outside the benchmark index, Serko rose 4.6 percent to 91 cents. The online travel booking business reported a wider annual loss in line with its prospectus forecast while delivering slower growth in sales than anticipated, and is targeting profitability in the first half of 2017. The Auckland-based company posted a net loss of $6.43 million in the 12 months ended March 31, more than the $6.33 million forecast in offer documents when the company was floated last year. Sales rose 55 percent to $10.4 million, about 5.8 percent below the prospectus forecast and in line with Serko's warning in March that it would miss that target.

Hellaby Holdings fell 0.3 percent to $2.99. The diversified investment group said it acquired two businesses to strengthen its auto parts and truck servicing operations, for an all-up cost of less than $25 million.

Comvita fell 1.2 percent to $4.10. The Te Puke-based maker of health products based on manuka honey boosted annual profit 28 percent to $10.2 million, beating expectations, and said purchases by Asian tourists to New Zealand helped drive sales. The board declared a dividend of 9 cents per share, taking its total payments for the year to 13 cents, up from 12 cents a year earlier.

BusinessDesk.co.nz

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