Hallenstein’s healthy rag trade leads NZX50 higher; Grenon nabs more of NZME

Hallenstein Glasson Holdings led the S&P/NZX 50 index higher with the clothing retailer managing to maintain its margins while lifting annual sales, despite the soggy local economy.

Meanwhile, earnings from Air New Zealand and Summerset Group Holdings were warmly received by investors, with both notching up gains on the day, if not quite reaching the heady heights Qantas Airways achieved across the Tasman with its second-biggest ever profit.

Outside the benchmark index, NZME director Jim Grenon lifted his stake further, following on from the media group’s solid first-half result earlier this week.

And Nvidia delivered on its record quarterly top and bottom lines, but still dropped in afterhours trading as its data centres revenue fell short of expectations while investors question the pace of growth in the artificial intelligence sector.

Rising tides

The NZX50 rose 41.24 points, or 0.3%, to 12,903.08, with 31 stocks gaining, 12 declining, and seven unchanged. Turnover across the main board was $169.6 million, of which Ebos Group accounted for $25.8 million, as it extended its decline, falling 3.8% to $32.55.

Hallenstein Glasson led the benchmark index higher, climbing 5.6% to $8.52 after the clothing chain said annual sales rose 8.1% to $430 million and it managed to maintain gross margin, with net profit expected to rise 14%.

“Margins were steady and they haven’t been discounting,” said Greg Smith, head of retail at Devon Funds Management. “A lot of retailers have had to discount heavily.”

Among other retailers, Briscoe Group rose 1.6% to $5.75, while KMD Brands dropped 4.2% to 23 cents, a new low for the outdoor equipment chain.

Air New Zealand climbed 1.7% to 59.5 cents after reporting a 15% decline in pre-tax earnings as ongoing engine maintenance kept planes grounded and limited the carrier’s capacity. The airline said the outlook was too uncertain to provide annual guidance, but it said first-half earnings were likely to be $34 million or less.

That was in contrast to Australia’s Qantas, which was up 8.9% in late trading, after reporting its second-biggest ever profit.

Summerset advanced 1.1% to $10.65 after lifting first-half earnings 19%, with new sales growth of 22%. Ryman Healthcare fell 1.7% to $2.37.

Blue steel

Vulcan Steel rose 1.4% to $7.30 when it resumed trading after raising A$59.4 million in the institutional component of a capital raising to fund its purchase of Roofing Industries.

Heavyweight stock Meridian Energy was one of the major tailwinds for the benchmark index as it rose 3.5% to $5.61.

Vista Group International posted the biggest decline on the day, falling 6.1% to $2.93, while Serko fell 2% to $2.40.

Infratilm, which counts the CDC data centres business as its biggest investment, declined 1.9% to $11.58 after Nvidia’s quarterly earnings missed revenue expectations from the chipmaker’s data centre segment, with investors nervous about the pace of growth in the AI sector. Nvidia’s shares fell 3.1% in afterhours trading, even as it reported record revenue and profit.

Outside the benchmark index, NZME was the most heavily traded stock on the day, with 6.8 million shares changing hands. Director Jim Grenon, who agitated for change earlier this year, said he bought 5.8 million, and that the required reporting would come soon. That would increase his stake in the media group, which reported a 12% lift in first-half earnings earlier this week, to about 16%.

The kiwi dollar traded at 58.60 US cents at 5pm in Auckland from 58.46 cents yesterday, with Statistics New Zealand figures showing filled jobs rose 0.2% in July, while ANZ’s business outlook survey showed a small increase in confidence among firms, although expected activity declined.

And Alvarium NZ Wealth Management, which owns Pathfinder Asset Management, has bought Salt Funds Management for an undisclosed sum, bringing its total funds under advice to more than $4.3 billion.

Reporting by Paul McBeth. Image from Tim Marshall on Unsplash.