Yovich & Co. Market Update - 23 November 2018

Nov 23, 2018 | Commentary

Market Week 2018 11 23






New Zealand Equities

In summary, the NZX50 had 36 companies on the downside, 2 remained unchanged and 12 companies were on the upside. The biggest movers of the week were Fisher and Paykel Healthcare -6.48%, Ryman -6.05%, Fletcher Building -5.24%, Westpac -5.22% and Metlifecare -5.03% on the downside, with Mainfreight 6.16%, EBOS 4.54%, Trustpower 2.06%, Spark 2.20% and Vital Healthcare 1.2% on the upside.

Heartland Group

This is a New Zealand bank that is performing well. Tax paid profit for the 3 months ending 30 September is up 8.7% at $17.4m from $16m. In NZ it focuses on three key markets: household, which includes investment products, consumer lending, reverse mortgages and motor vehicle lending. In Australia, it is a specialist provider of reverse mortgage loans and also provides funding to partners in the small business and consumer lending sectors.

 Net finance receivables are up 11% at $4.1bnpcp, with annualised growth up 10.2% for the year ending 30 June.

As from 1 November shares that were formerly known as Heartland Bank (HLB.nz) began trading as Heartland Group (HGH.nz/asx). This was due to a restructure, and the ASX listing, which is a significant milestone for the group and provides a more suitable platform for future growth. This will provide greater flexibility to explore and take advantage of future growth opportunities in New Zealand and Australia outside the banking group.

Kiwi Property Group

KPG has a strategy of focusing on establishing mixed-use real estate precincts that incorporate a combination of retail, office, hotel, and residential property, mixed-use opportunities are present at Sylvia Park, The Base, Lynn Mall, and Drury.

Tax paid profit for the half year to 30 September is $48.3m up from $47.9m.

The interim gross dividend of $0.044 per share is payable 19 December, with projected cash dividend for the year ending 31 March 2019 to be $0.0695 per share, up from $0.0685 per share for the prior year.

Kiwi Property Group has a property value of $3bn with portfolio occupancy of 99.3%.

Current  price is $1.37

InvestoreProperty Limited

IPL’s investment strategies are: Focussing on standalone large format retail properties comprising of the non-discretionary retail sector. Also acquiring properties adjacent to existing Investore properties to provide opportunities for future development or further development of existing premises, to meet the tenants’ requirements. These properties in the portfolio have long lease terms and are nationally recognised tenants.

The interim quarterly gross dividend of $0.0237c per share is payable 12 December, with projected cash dividend for the year ending 31 March 2019 to be $0.0746 per share, up from $0.0685c per share for the prior year.

Tax paid profit for the half year to 30 September is up 3.9% at $10.8m up from $10.34m.

InvestoreProperty Limited has a property value of $740.4m with portfolio occupancy of 99.9%.

Current price is $1.50.

Metro Performance Glass

The new announcement of Architectural Profiles Ltd, a new player in the class manufacturing sector has shattered Metro Performance Glass share price with it dropping 38%, and is now trading at 56c per share. New research will be out on Monday as Metro Performance Glass 1H earnings will be released.


Mainfreight is a specialist freight forwarding and distribution business, with interests also in managed warehousing, transportation of hazardous substances, air & ocean international freight, full truckload freight and Global Supply Chain Logistics, with managed warehousing in NZ, Australia, USA and Europe.

Tax paid profit for the 1H19 is up 30.7% at $55.9m from $42.8m.

 The Interim dividend of $0.022 per share is payable 14 December.

With the current share price of $30.80 expected gross yield is 2.4%.

Argosy Property 

ARG’s property portfolio mix is made up of:

7% Value add properties this is to drive earning and capital growth.

83% Core properties, these are industrial 40-50%, office 30-40% and retail 15-25%.

10% properties and land to divest.

Argosy Property FY19 interim results showed income is up 5.5% at $50.8m from 48.5% pcp, with tax paid profit up at $66.8m from $23.1m pcp, debt-to-total assets ratio of 36.38%.

The interim gross dividend is $0.0195 per share payable on 19 December, and there is a FY19 net dividend guidance of $0.0625 per share.

Current price is $1.13

Stride Property Ltd

SPG is unique in New Zealand, as it combines two businesses in one integrated business model, Stride Property Limited, (SPL) and Stride Investment Management Limited (SIML).

SPL owns quality New Zealand property investments, has a cornerstone 19.9% shareholding in Investore Property Limited (Investore) and owns 2% of the units in Diversified NZ Property Trust (Diversified). SIML is a specialist real estate investment manager, managing over $2.2 billion of investment property across the property portfolios of SPL, Investore and Diversified.

Stride’s portfolio mix is as follows: 25% commercial offices, 25% industrial, 5% large format retail and 45% retail shopping centres.

The half-year ending 30 September report shows Stride has, tax paid profit of $40.2m this is up $6.9m pcp, with net tangible assets at $1.88 up from $1.70 per share and debt-to-total assets ratio of 34.2%.

Total portfolio value up 2.7% at $934.5m from $910.9m since March 2018.

An interim quarterly gross dividend of $0.0259 is payable 17 December, with a targeted cash dividend for FY19 of $0.091 per share. Current price is $1.87

Fletcher Building

FBU released its FY2019 forecast guidance and is expecting EBIT to be in the range of $630m to $680m this is 10% lower than EBIT reported in the HY2018.

FBU will only be paying a dividend in the FY19 if satisfactory trading conditions and group cash flows allow.

Net earnings for FY18 are down $284m from $94m to -$190m.

Current price is $4.70.


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Nathanael McDonald

Related Tags

Kiwi Property Group Ltd KPG.nz Heartland Group Ltd HGH.nz Investore Property Ltd IPL.nz Metro Performance Glass MPG.nz Mainfreight MFT.nz Argosy Property ARG.nz Stride Property Ltd SPL.nz Fletcher Building FBU.nz


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