MARKET CLOSE: NZ shares rose

New Zealand shares gained on Friday, led by A2 Milk Co and Fisher & Paykel Healthcare, while Metro Performance Glass plunged after disappointing investors.

The S&P/NZX50 Index advanced 40.85 points, or 0.6%, to 7094.39. Within the index, 25 stocks rose, 14 fell and 11 were unchanged. Turnover was $145 million.

Metro Glass was the worst performer, down 18.5% to $1.54. The Auckland-based company, which has more than half the country's glass processing market, said annual net profit was likely to be similar or even lower than the previous year's $20.5 million as local sales lagged behind expectations and costs were higher than expected.

In a conference call with analysts and investors chief executive Nigel Rigby underscored that the company is "going well" in a revenue sense but said a recent learning curve as it scales up production, distribution and technological capability has increased costs.

"They released a pretty disappointing update," said Greg Easton, an adviser at Craigs Investment Partners. "They achieved very well on the revenue growth front. However, they've had to spend a lot on some of their expansion plans and that spending hasn't yet been offset by increased revenue. They did note the slowdown in the Christchurch residential build, and the earthquakes in Wellington stalling activity for a while. They're still pretty upbeat generally about the future."

A2 Milk led the index, up 3.9% to $2.38, continuing Thursday's gains when it was reported that UK consumer giant Reckitt Benckiser is in talks to buy Mead Johnson Nutrition, the US-based baby-food maker, for $US90 per share, nearly a 30% premium. The negotiations value Mead Johnson's entire share capital at approximately $US16.7 billion, according to Reuters.

"It's an interesting sector. There are a whole bunch of companies that move depending on what the others do," Mr Easton said. "We're also seeing other exporters up today, there's a bit of weakness in the dollar possibly giving them a wee lift as well. A2's an amazingly volatile stock at the best of times."

F&P Healthcare rose 2.3% to $9, Fletcher Building gained 1.8% to $10.32, and Argosy Property advanced 1.5% to $1.04.

Sky Network Television dropped 2.6% to $4.43, SkyCity Entertainment Group fell 1.9% to $3.72, and Comvita declined 1.4% to $7.

NZX dipped 0.9% to $1.10. Cash trading volumes on the NZX slowed 12% in January, continuing December's trend, while the value of trading rose 2.3% to $2.2 billion despite fewer small trades.

Outside the benchmark index, Intueri Education Group plummeted 50% to 1.5c. The Auckland-based private education provider will quit Australia by the end of the year after losing federal government subsidies and is considering bids for some of its assets, saying it was probably in breach of its banking covenants in 2016. In New Zealand, it's under Serious Fraud Office investigation over its Quantum unit.

Hallenstein Glasson Holdings gained 3% to $3.40. The clothing retailer said first-half profit rose about 34% to between $9 million and $9.2 million after it enjoyed a stronger Christmas trading season. Group sales rose 9.4% to $122.9 million in the six months to Feb. 1, with an 11% gain over the critical December period.

Tenon was unchanged at $2.41. The Taupo-based company, which sold its US operations for US$110 million last year, has revised full-year guidance for its remaining Clearwood New Zealand business to reflect foreign exchange movements, Tenon corporate costs and changes in product mix.

Plexure Group was unchanged at 27c. The digital advertising firm, formerly known as VMob, raised $1.6 million through an issue of convertible notes and the funds will be used to support ongoing operations.

(BusinessDesk)