Yovich & Co. Market Update - 07 August 2019

Aug 8, 2019 | Commentary

 



Market News

In summary, last week saw the NZX50 with 21 companies on the downside, 26 companies were on the upside and 3 unchanged. The NZD/USD decreased for a second week by 1.48%, this is good news for companies exporting products to the USA. The Reserve Bank of NZ announced a new OCR rate on 7 August, dropping it from 1.5% to 1 %, this is a record low for NZ. The announcement has surpassed the expectations of many economists who were only expecting a 0.25% drop. The next three weeks is the reporting season for many of the NZ listed companies. New vehicles have continued the trend of negative results with July trending -1.4%, while commercial vehicle sales were down -7.3% due to weaker business sentiment. 

 

 

 

Investment News

New Zealand Equities

Abano Healthcare

Tax paid profit for the FY19 was down 39.50% at $7.618m, while revenue was up 8% at $338.9m. Abano now has 239 dental practices throughout NZ and Australia. Lumino is the NZ practice that delivered revenue growth of 1.2%, while Maven Dental Group the Australian practice had a weaker performance of -2.9%. Abono changed its strategic plan in the second half of FY19, from acquisition to organic growth which will result in a savings of $1.8m of acquisition costs. The gross dividend of 10.78 cents is payable 3 September, providing a total gross dividend of 30.51 cents per share. Current share price: $3.95, Gross yield: 7.72%.

Steel & Tube

Announced a FY19 EBIT guidance in the range of $15.5m to $17.5m. Market share and volume gains have led to an increase in revenue; disciplined cost management has seen operating costs reduce, and the company has a strong balance sheet with net debt reduced to $15m. Current share price: $0.89, Gross yield: 5.46%.

Pacific Edge

The loss of $17.9m for the FY19 is an improvement of 9%, cash on hand increased 21% to $12.8m.  Pacific Edge has been able to achieve strong growth in NZ and US commercial sales particularly in Q4, along with a growing presence in Southeast Asia, and a new sales focus in Australia. Two of the three reimbursements milestones are ticked off, the first allowing Pacific Edge the ability to move into contract negotiation with private payers, the second setting a national price for all Cxbladder tests of $760 per test in October 2018. Current share price: $0.27.

Fonterra

Has announced its intention to sell a portion of its stake in the Beingmate Baby & Child Food Company, which it currently has a shareholding of 18.8%. This is part of Fonterra’s three-point plan to turn the business around.

Kathmandu

Has announced unaudited results for FY19 with total sales amount of NZ$5.45m, up 9.6%, NPAT in the range of NZ$55.5m and NZ$57m compared to NZ$50.5m in FY18 and net debt at NZ$19.2m from NZ$31.4m for FY18.

 

 

 

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Nathanael McDonald



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Weekly Update Investment Shares Bonds Investment Strategy Investment Advice Share Advice Share Investment Investing in Shares Steel & Tube STU.nz Kathmandu Holdings Ltd KMD.nz Fonterra Co-operative FSF.nz Pacific Edge Limited PEB.nz Abano Healthcare ABA.nz



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