MARKET CLOSE: Shares rise to record, led by Xero, A2

New Zealand shares rose, pushing the NZX 50 Index to a record, as investors cheered Xero's US capital raising. A2 Milk Co paced the gain on its plans to list in Australia.

The NZX 50 Index rose 19.39 points, or 0.3 percent, to 5861.682. Within the index, 19 stocks rose, 24 fell and seven were unchanged. Turnover was $198 million.

Xero advanced 8.7 percent to $25 the highest its been since August, extending yesterday's gains after the cloud-based accounting software firm announced Silicon Valley venture capital firm Accel Partners and Matrix Capital Management, its biggest shareholder, invested $147 million in the firm, doubling its cash balance to $285 million.

"It's starting to regain a lot of the ground it lost once it started coming back form $40 odd there," said Robert Garden, investment advisor at Craigs Investment Partners. "The addition of new capital and support it has had from exisiting shareholders is good for the business and obviously sparked investor interest back in it again. But we will need to see more concrete evidence come out over time to justify the bounce we've seen."

A2 Milk Co climbed 3.6 percent to 57 cents. Yesterday the company lodged its plans to list on the ASX, boosting its profile in Australia where it has 9.3 percent of the fresh milk market and earns most of its income.

"If they list over on the ASX the company is going to be a lot more visible to Australian investors," Garden said. "Australia market has been where they're achieveing growth in their sales of a2 milk."

Spark New Zealand, formerly Telecom Corp, climbed 1.9 percent to $3.29. Air New Zealand, the national carrier, rose 1.5 percent to $2.80. Meridian Energy, the government owned power generator and retailer, rose 0.9 percent to $2.15.

Vital Healthcare fell 1.2 percent to $1.64 after its distributable earnings declined 21 percent to $16.3 million as it faced a bigger tax expense relating to income received in advance of its Mercy Ascot 30-year lease renewal.

Outside the benchmark index, earnings season continued. Intueri Education Group, dropped 10 percent to $2.59 after New Zealand's largest private education provider missed its annual earnings forecast with full-year profit of $4 million on sales of $34.5 million, with a slower than expected recovery following the Canterbury quakes weighing on its returns.

Scales Corp rose 2 percent to $1.54 after the newly listed orchard and fruit packing company's annual profit beat its offer document forecast with earnings of $18.4 million on revenue of $264.3 million as apple export volumes and prices were ahead of expectations.

Turners & Growers declined 2.6 percent to $1.85. The fruit marketer posted a 1.9 percent decline in annual profit to $16.6 million on revenue of $727 million as it dealt with supply shortages in international produce and declining fruit volumes for its processing unit.

Veritas Investment dropped 6.4 percent to $1.17 after its first-half profit slid 16 percent to $1.71 million due to costs associated with buying the Nosh Food Market gourmet supermarket chain and The Better Bar Group, while boosting revenue 89 percent to $27.4 million.

Gentrack Group climbed 3.6 percent to $2.33 after the utilities and airports software developer affirmed its annual profit guidance for net profit of $9.3 million on revenue of $44.7 million in the year ending Sept. 30. and said it is looking at potential acquisitions in its core markets.

(BusinessDesk)