MARKET CLOSE: NZ shares rise, Kathmandu + Briscoes gain on sales while Xero at new high.

Thursday 3rd August 2017

New Zealand shares hit a fresh record, with retailers Kathmandu Holdings and Briscoe Group gaining on positive earnings, while Xero hit a new high.

The S&P/NZX50 Index rose 5.44 points, or 0.07 percent, to 7,753.75. Within the index, 30 stocks rose, 12 fell and eight were unchanged. Turnover was $225.4 million.

"We're up nearly 13 percent for the year, a very good performance and we've set up some quite high expectations going into reporting season," said Mark Lister, head of private wealth research at Craigs Investment Partners. "People are watching the global reporting season continue. It's gone very well and our reporting season has kicked off in a minor way but really gets going the week after next. We're a bit thin on news flow ahead of those results coming out."

Freightways was the best performer, up 2.1 percent to $8.15, while Vector gained 1.8 percent to $3.40 and CBL Corp gained 1.6 percent to $3.75.

Kathmandu Holdings rose 0.9 percent to $2.28. Full-year profit rose as much as 13 percent to $37.4 million and $38 million after a successful winter sales season and increased revenue from Australia. Earnings before interest and tax were in a range of $56 million to $57 million, from $50.9 million in the previous year.

In March, the retailer beat its first-half guidance, having bounced back from an earnings slump in 2015 when an inventory build-up forced it into aggressive discounting at low margins to clear stock. Kathmandu shares have climbed 29 percent in the past 12 months, outpacing a 6.4 percent gain for the NZX 50 Index.

Xero rose 0.5 percent to $27.80, marking eight consecutive sessions of gains and another record price.

"It was up quite strongly at one point in the day, it continues to run very well and has had a pretty strong week - up 7 percent so far. People just continue to get comfortable with the story," Lister said. "It's up 59 percent this year, in the top three stocks for the NZX50 and having another good day today."

TradeMe Group was the worst performer, down 4.2 percent to $5.23. Auckland International Airport fell 1.2 percent to $6.80 and Sky Network Television dropped 0.9 percent to $3.32.

Outside the benchmark index, Briscoe Group gained 0.7 percent to $4.09. The retailer saw slower sales growth than expected in the second quarter, which it put down to a late winter and the Lions rugby tour, but says it is generally happy with the first half of the year.

Revenue rose 2.6 percent to $139 million in the three months ended July 30 and gained 3 percent on a same-store basis, the Auckland-based company said in a statement. Homeware sales across the group rose 0.8 percent and sporting goods sales gained 6.2 percent in the quarter.

"Briscoes has managed to prove everyone wrong for a long time and continue growing and expanding margins to a much greater degree than most people would've expected," Lister said. "They've certainly had a very strong run and still very good quality business."

(BusinessDesk)

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