The latest Covid lockdown has delivered a sharp jab to many NZ businesses, but not what they had been encouraged to think our wellbeing-focused government was planning for them. It has taken the gloss off what might otherwise have been regarded as a strong reporting season for NZX-listed companies.
The spike in coronavirus cases has led to NZ falling 26 places in Bloomberg’s Covid Resilience Rank.
We had been the longest-running first-ranked country on the Bloomberg watch-list, since the inception of the ranking in November 2020. The plunge follows the spread of the Delta variant in Auckland and Wellington, which (when we checked yesterday) has resulted in 347 people testing positive for the virus across Auckland and Wellington.
Prime Minister Jacinda Ardern says lockdown is starting to work and she insists she is acting on the “best advice” in keeping the whole country locked down until Wednesday, when there will be a slight easing with the rest of the country south of Auckland moving to level 3.
NZ is now ranked 29th on the Bloomberg ladder, two places above Australia which announced 1000 new cases on Thursday – Australia’s worst day of cases since the pandemic began. Continue reading “Ports of Tauranga deserves plaudits for its performance in Covid-troubled times”
Auckland-based medical equipment manufacturer Fisher & Paykel Healthcare has posted a record full-year result, as the pandemic drove unprecedented demand for its products.
Its net profit for the year to March rocketed 82% to $524m, as sales increased by more than half to $1.97bn.
It is proving one of the country’s most successful business enterprises.
But even its founders, including the legendary Sir Woolf Fisher, would have been astonished at its latest remarkable performance.
Led by its outstanding CEO, Lewis Gradon, the company’s latest result was driven by an 87% increase in sales of its hospital products, including its Optiflow and Aviro systems, which have proven to be effective in treating people who have Covid-19.
Sales of its hospital hardware and consumables continued to track Covid-19 hospitalisation surges in countries around the world.
The pandemic had also accelerated the company’s expansion into different global markets, with significant growth in the North America, Europe, Asia Pacific regions.
The strength of the result saw the company look to reward all of its staff with a profit-sharing bonus of $29m. Continue reading “Investors respond perversely to F&P Healthcare’s record profit and booming sales – but staff will benefit from the cheering result”
So what are the chances Fonterra’s payout to its farmer-suppliers could top $8kg/MS the soon-to-end current season?
That would give a timely boost to the rural economy and give farmers the kind of surge in incomes which would encourage them to step up the pace of adapting their dairy farming practices as the country moves to meet its climate change goals.
In March, Fonterra raised its forecast milk price for this season to between $7.30 and $7.90kg/MS with a mid-point of $7.60. That was up from $7.14 last season.
But now, after several good results from the fortnightly GDT auctions, and indications from futures contract prices, the speculation is that the payout could go higher.
While the GDT index slipped 0.7% at the latest auction this week, the price of whole milk powder, which has the most impact on what farmers are paid, gained 0.7% to an average US$4115 (NZ$5756) a tonne while skim milk powder, the second-most important, rose 2% to US$3433/t.
Butter prices slumped 12% to US$5035/t, weighed down by extra volume on offer. Continue reading “Two big announcements awaited from Fonterra – one deals with dairy payout, the other with the co-op’s capital structure”
Investors this week took the phenomenal result for a2 Milk in their stride, but it may have produced a few blinks round the nation’s dairy farms, particularly with the farmer-suppliers of Fonterra.
Take – for example – a2 Milk’s earnings per share of 52.39c and contrast them with Fonterra’s 17c per share in 2019, or its net profit of $385.8m versus Fonterra’s loss of $605m.
There are other mind-blowing figures from a2 Milk: total revenue of $1.73bn, up 32.8%; ebitda of $549.7m, a rise of 32.9%; and operating cash flow of $427.4m. Not to mention a cash mountain it has built up of $854.2m.
As one commentator has put it, a2 Milk with its record growth intrinsically linked to the China market, is a success story New Zealanders should both celebrate and learn from.
Even its Dunedin founders through its early years from 2000, Dr Corrin McLachlan and Howard Paterson, might be astonished at its latest result.
Continue reading “It’s the beta-casein and premium product that makes a big difference between a2 Milk and Fonterra”
Here’s a conundrum: thousands of New Zealanders are losing their jobs, yet the NZX top 50 index is back almost to its peak of 12,065 it hit on February 20.
Opposition politicians say NZ is facing an economic disaster. As many as 150,000 jobs could be lost. The Reserve Bank believes unemployment will rise to 9%.
The sector which was the country’s biggest foreign exchange earner has been shut down. International education which brought in $5bn has also gone down the plughole. And all the government is doing is throwing billions at the problem in wage subsidies.
Of course there is relief that the country has succeeded in quelling Covid-19 under the leadership of Jacinda Ardern (for which she is admired around the world), and has moved to alert level one. Continue reading “Making the most of it might be smarter than trying to fathom reasons for the NZX’s big bounce-back”
A slight bounce in the economy is brightening the outlook as the country heads into the winter months, Radio NZ reports.
Retail spending is up and NZ shares rose on Thursday for a third day running. Key indicators have led some economists to point to a faster recovery than expected.
Finance Minister Grant Robertson, never afraid to cite how well the economy has done under his stewardship, told Parliament earlier in the week:
“We are already seeing a significant lift in economic activity from moving from alert levels 3 and 2”.
Robertson reported the weekly economic update from Treasury showed improvements in economic activity.
Heavy traffic movement is now only 5% below its normal levels, while electricity demand is now above pre-COVID levels, and electronic card spending during level 2 has been nearly equal to pre-COVID levels. Continue reading “While some people are queuing for food parcels or the dole, others are prospering from NZX investments”
As New Zealand faces the most brutal recession in living memory, the battle to preserve the core of the economy deepens. Companies are cancelling dividends to protect what cash they have, others are reaching for financial aid from their banks or the government.
Yet for some businesses, notably the big supermarket chains, the crisis is accelerating their cash flows.
Point of Order has surveyed an array of companies listed on NZX, particularly in several sectors—food production, health and pharmaceutical supplies, transport, agriculture services— which have issued updates. These should provide comfort to their shareholders, and the market generally.
Latest to do so is King Salmon, the world’s largest aquaculture producer of the premium King salmon species. Employing 500 people, it operates within the primary industry food producer category which has been included in the government’s list of essential services.
In its update to the NZX, it says : Continue reading “Updates from listed companies bring some economic comfort during the Covid-19 crisis”
Is Plexure the next rising star on the NZX, ready to follow the trajectory of Xero?
It’s a mobile marketing company, using an intelligent technology platform which powers customers’ mobile marketing activities. The platform incorporates Artificial Intelligence (AI) and Machine Learning (ML) features which augment Plexure’s capabilities in the areas of personalisation, advanced analytics and platform security.
Plexure’s trading performance has improved dramatically. Customer usage is at record levels and accelerating with 30m new users downloading its apps. This has driven revenues to a new high of $16.9m for the year ended March 31, when it had $7.3m in the bank.
Revenue guidance for the current year is in a range from $21m to $23m. By comparison with the FY19 revenues of $16.9m, this represents a 24.3% rise at the lower end of the range and a 36.1% rise at the upper end of the range. Continue reading “Looking for a star? We have the Plexure of suggesting it might be found in the cloud”
New Zealand eyes have been so focussed this week on an event 20,000kms distant that they might not have noticed here at home another extraordinary event, taking place on the NZX.
The market capitalisation of a company which listed as recently as 2012 on the local sharemarket soared past the $12bn mark and is hard on the heels of Meridian Energy, which has the highest valuation of NZ-based companies on the NZX at $12.3bn.
The challenger is a2 Milk, which sells a specialised type of milk with what it claims are health benefits.
A2 has had a chequered history but its market valuation keeps climbing, racing ahead of blue chips like Auckland International Airport and Fisher & Paykel Healthcare and leaving in its dust some one-time market darlings like Fletcher Buildings (market cap $4.3bn) and Spark ($7.2bn). Continue reading “Forget about following the floundering fortunes of Fonterra – a2 Milk is the NZX’s fast-rising star”
Winston Peters, it will be recalled, in his speech on choosing Labour as a coalition partner last October said:
Far too many New Zealanders have come to view today’s capitalism not as their friend, but as their foe. And they are not all wrong.
“That is why we believe that capitalism must regain its responsible, its human, face. That perception has influenced our negotiations. We’ve had to make a choice, whether it was with either National or Labour, for a modified status quo, or for change”.
He spoke then of burying the “neo-liberal experiment” which NZ had undergone at the hands of both previous National and Labour governing coalitions. Continue reading “An economic facelift should be under way but Peters is coy about the prettying”