Pavan Sharma

Fletcher Building shares were lower when it revealed a weak earnings guidance for the 2023 financial year a couple of days ahead of its half year earnings announcement – shaving off most of the gains made in February as market anticipated Flecther to be a major benefactor to the rebuild following the major floods across the north island. However, Fletcher announced they anticipate 2023 full year earnings (EBIT) are expected to be between $800m to $855m down from its previous guidance of above $855m, while first half trading was strong January and February trading has been impacted by adverse weather events in the upper north island of NZ.

Retain Neutral. Strong earnings ($2.59 vs $2.46 est) show the strength of the consumer but MCD still trades at 23x earnings; we prefer to wait for the stock to rerate.

The New Zealand Market (NZX50 Index -2.1%) fell on the start of one of the busiest weeks for local the local market. Cyclone Gabrielle damage is expected to reach $8B, which majority aimed to be covered by insurance companies while the government tapping in emergency funding to spur recovery efforts – however it is believed this could be another inflationary event – making RBNZ’s job tougher to tame inflation.

QBE stock was up strongly after delivering a well-received result for the 2022 financial year; earnings came in at $847m, well ahead of expectations. The result was driven by top-line growth help by gross premium growth and strong investment income (helped by higher interest rate environment). NPAT beat by ~15-21% on the back of stronger investment income & a new reinsurance deal with Enstar which sees the company’s reserve risk reduce significantly.

QBE delivers a stellar result and soars; Manchester United’s bidding war gets serious, and more.

Tourism Holdings reports, Manchester United bidding war heats up, and unemployment in Australia rises.

Ryman Healthcare was put in a trading halt yesterday to announce a $902m capital raise, intended to pay down its debt, lowering gearing (LTV) from 45.3% to 33.9%. Shareholders will be offered one share for every 2.81 at $5.00 each, at a 22% discount to the previous trading price. Ryman has historically avoided capital raises, preferring to use debt, but as the company is already quite highly geared management has no choice but to go the capital raising route.

CSL shares rose +0.9% as the market responded relatively positively to the release of the company’s half-year results. For the six months ended 31 December, CSL reported a 19% increase in revenue to US$7,183.5m and a +10% lift in net profit after tax (NPAT) in constant currency to US$1,957m. This was driven partly by a five-month contribution from Vifor Pharma, strong growth in immunoglobulin and albumin sales, and record levels of plasma collections.