MARKET TALK: Solid company results so far but cricket debacle hurts Sky TV ahead of its result

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Halfway through the company reporting season most firms have produced results in line with expectations, while a few have surprised on the upside, says Mark Lister of Craigs Investment Partners.

Mr Lister says the sharemarket has handled the company reports well.

While Fletcher Building [NZX: FBU] continues to struggle in Australia and has incurred further asset writedowns, most other firms in the S&P NZX top 10 index are coping well with electricity companies Contact Energy [NZX: CEN] and Meridian Energy [NZX:MEL] set to reward their shareholders with special dividends.

Even mid cap stock Skellerup [NZX: SKL], which is reasonably exposed to the local dairy industry, is handling the current conditions better than expected thanks to a diversification programme.

Its agriculture division held up well though.

“People were picking that to be soft given what we are seeing in the dairy sector,” Mr Lister said. “But revenues [from the agri-division] were actually flat, so that was not a bad outcome.”

Looking ahead to tomorrow and next week, Chorus [NZX: CNU], Spark [NZX: SPK] and Sky TV [NZX: SKT] are ones to watch with focus on the first two company’s dividend in particular.

Sky TV investors may be a little cautious, Mr Lister says, given the competitive pressure from online digital platforms.

“There are a lot of good things about their business model but you have got this feeling that you are going to see more and more erosion around the fringes from competitors. So it will be difficult for them to maintain prices and subscriber numbers to the same degree they have.”

Sky TV’s result tomorrow comes amid criticism that it failed to secure live coverage of the Black Caps cricket tour of South Africa, with fans unable to watch last night’s first one-day match and the preceding two twenty20 International games.

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