Spark New Zealand fell to a 13-year low on heavier volumes than usual as the country’s biggest broadband provider remained out of favour, despite still carrying rights to an upcoming dividend payment.
The telco’s shares dropped 4.6% to $2.06 on a volume of 10.9 million shares, leading the S&P/NZX 50 index lower, as investors continue to question whether it will be able to deliver on its earnings guidance, after last year’s multiple downgrades.
“It’s depending on significant cost cutting to meet their guidance at a time when the top line is deteriorating,” said Matt Goodson, managing director at Salt Funds Management. “And the balance sheet is starting to look on the extended side.”
Chair Justine Smyth provided a vote in confidence in the company with a notice filed to the stock market operator that she bought almost 51,000 shares at about $2.26 apiece on March 13, taking her holding to almost 662,000.
The sustainability of Spark’s dividend and its balance sheet were questioned by S&P earlier this month when the rating agency put the telco’s A- credit rating on a negative outlook.
Mark Lister, investment director at Craigs Investment Partners, said the company’s been a dog.
“At what point do you start wondering whether they’ve got the right people running it,” Lister said.
The odd one out
That was in a broadly weaker domestic trading session as the NZX50 dropped 100.11 points, or 0.8%, to 12,166.14, ignoring the strong lead from Wall Street on Friday that triggered a rally across Asia.
Australia’s S&P/ASX 200 index was up 0.6% in late trading, while Japan’s Nikkei 225 gained 1.3%, Singapore’s Straits Times Index increased 0.8% and Hong Kong’s Hang Seng climbed 1.3%.
Power companies were weaker after Meridian Energy’s latest operating metrics showed dwindling hydro levels, with the stock down 2.4% at $5.35. Contact Energy declined 2.2% to $8.60, Genesis Energy fell 2.2% to $2.22 and Mercury NZ slipped 1.2% to $5.62.
Ryman Healthcare dropped 3.8% to $2.80 as shares from the retail component of its $1 billion capital raising were allotted. Summerset Group Holdings, meanwhile, rose 1.5% to $11.86.
NZ King Salmon Investments dropped 12% to 23 cents after saying it’s experiencing higher fish mortality rates than it expected, which will flow into its 2026 financial year.
The a2 Milk Co posted the biggest gain on the benchmark index, rising 2.9% to $9.72. It’s also carrying rights to its maiden dividend.
Fletcher Building gained 2.2% to $3.28, while Infratil advanced 2.2% to $10.38.
Smartpay Holdings jumped 35% to 85 cents after confirming media reports over the weekend that it’s received interest from potential buyers, including a non-binding offer at $1 a share from ASX-listed rival Tyro Payments in cash and shares through a scheme of arrangement. The payments firm has granted both potential buyers limited due diligence.
Local data today showed a pickup in house prices in February, although services sector activity contracted in the month.
The kiwi dollar climbed to 57.61 US cents at 5pm in Auckland from 57.41 cents at 7am and 57.09 cents on Friday.
Reporting by Paul McBeth. Image from Curious News.