KMD rallies on cost-cutting drive; NZX50 posts strongest week since May

KMD Brands led the S&P/NZX 50 index higher as investors welcome the retailer’s latest efforts to get back on an even-keel with plans to strip out $25 million of annual costs, in a trading session that retailers on both sides of the Tasman seemed to enjoy.

Meanwhile, index heavyweights such as Fisher & Paykel Healthcare and Infratil paced gains for the top 50 companies, joining a buoyant mood set on Wall Street when increased US jobless claims heightened expectations for the Federal Reserve to cut the federal funds rate when it meets later this month.

Fletcher Building posted the biggest decline on the day after releasing its remuneration report signalling a new incentive structure for the leadership team once the building materials firm finishes hauling its business over the coals.

And Port of Tauranga’s cornerstone shareholder, Quayside Holdings, has said it doesn’t intend to reduce its controlling stake until the time is right, with the Bay of Plenty Regional Council’s investment arm reporting a doubling in annual profit, due in part to a fair value gain involving the Marsden Maritime Holdings transaction.

A springy start

The NZX50 rose 90.33 points, or 0.7%, to 13,223.53, with 30 stocks gaining, 13 falling, and seven unchanged. That took the weekly gain to 2.3%, the best week since May when markets started to reverse the savaging they received from US President Donald Trump’s Liberation Day tariffs.

Turnover across the main board was $124.4 million, of which F&P Healthcare accounted for $11.7 million, Summerset Group Holdings $10.5 million and Infratil $10.4 million.

KMD Brands led the benchmark index higher on the day, up 10%, or 2.5 cents, at 27.5 cents. The retailer yesterday outlined plans for a return to profitability, including a target of $25 million of annual savings.

Forsyth Barr analysts kept their ‘neutral’ rating on the stock and maintained the target price of 37 cents, saying the company’s team delivered a comprehensive strategic reset at its investor day on Thursday.

“While these initiatives are sensible, the operating backdrop remains challenging,” Forsyth Barr analyst Paul Laxton Koraua said in a note to clients. “Cost-out initiatives should help in the near term, but investors are likely to remain cautious until there is clear evidence that the strategy is delivering improved financial performance.”

KMD’s bounce came during an upbeat session for retailers on both sides of the Tasman, with Hallenstein Glasson Holdings advancing 3.2% to $9.10 and Briscoe Group – which is a shareholder of KMD – increasing 0.2% to $5.66. Meanwhile, Meyer, Harvey Norman and JB Hi-Fi were among ASX-listed retailers on the green side of the ledger.

Working hard for your money

Blue-chip stocks paced gains on the local bourse as investors turn their eyes to US nonfarm payrolls data on Friday, which are expected to show the world’s biggest economy added 75,000 jobs in August.

Higher weekly jobless claims than expected have heightened anticipation for the Fed to cut its benchmark rate at its next policy meeting later this month. The kiwi dollar traded at 58.59 US cents at 5pm in Auckland from 58.67 cents yesterday.

Infratil rose 2.4% to $12.08, F&P Healthcare gained 2.1% to $37.89 and Mercury NZ gained 2% to $6.72.

Vista Group International rose 3.6% to $3.14 after the Accident Compensation Corp’s investment arm emerged as a substantial shareholder following Australian private equity firm Potentia Capital’s exit from the cinema analytics firm earlier this week.

Meanwhile, Fletcher Building posted the biggest decline on the day, falling 3% to $3.22 after the building materials firm released its 2025 remuneration report – something it’s not required to do as a New Zealand incorporated firm – and signalling a new incentive structure once the strategic and operating model reviews are completed.

Among other companies on the red side of the ledger, Ebos Group fell 2.9% to $30.84 and SkyCity Entertainment Group declined 2.1% to 69.5 cents.

Ryman Healthcare was the most heavily traded stock on the day with a volume of 3.1 million shares as it rose 0.8% to $2.58.

Meanwhile, Stride Property Group slipped 0.8%, or 1 cent, to $1.28 after shedding rights to a 2 cents per share dividend.

Port of Tauranga was unchanged at $7.41 after its controlling shareholder, Quayside Holdings, said it won’t sell down its stake until conditions are right, when reporting a doubling of annual profit to $172 million for the June year.

Outside the benchmark index, NZ Rural Land Co rose 2% to $1 after tapping KPMG to undertake a capital review of the firm. Allied Farmers, which owns the rural landlord’s management contract, rose 0.7% to 76.5 cents.

And minnow would-be miner New Talisman Gold Mines dropped 13%, or 0.6 of a cent, to 4 cents after signalling it will raise more money for working capital, with it taking longer to get the mine up and running.

Reporting by Paul McBeth. Image from Curious News.