Latest news with #ForsythBarr
NZ Herald
7 days ago
- Business
- NZ Herald
Markets Outlook with Forsyth Barr
Forsyth Barr investment Strategist Zoe Wallis joined Ryan Bridge to look ahead to the big business and financial news of the week. She confirmed a 25 basis point OCR cut is expected on Wednesday, but noted the Reserve Bank is likely to remain cautious amid lingering inflation pressures and global trade uncertainty. Wallis also highlighted a focus on capital discipline in this week's company results and shared insights into how markets responded to the Budget. This interview and webpage do not contain financial advice - for financial advice, please speak to a Forsyth Barr Investment Adviser on 0800 367 227.
NZ Herald
18-05-2025
- Business
- NZ Herald
Gentrack raises first-half profit as airports provide ‘a long runway for growth'
The stock, which is down 2.45% year-to-date, closed on Friday at $11.16 for a $1.38b market cap. (Shares have to stay above $10 for chief executive Gary Miles to land his full market-leading remuneration). The first half saw the operational launch of Gentrack's first Saudi Arabian airport and 'the successful completion of an important part of the first phase of our contract with the Manchester Airports Group'. Upgrades were also delivered to two unnamed major Australasian airports. Gentrack said Veovo had also 'won London Gatwick's Integrated Airport Control project following a highly competitive process'. Gatwick already used Veovo for queue management. It would now add AI and machine-learning-based features. In utilities, Miles earlier told the pick up his firm was well-positioned to pick up work from the latest water reforms after not even being invited to pitch for Three Waters contracts. In the UK, the first half saw Gentrack win a billing software contract with Utility Warehouse, which it says supplies energy and telecom products to nearly two million meter points. Second-half guidance Gentrack gave only limited second-half guidance, which revealed potential to come in slightly shy of some of Forsyth Barr's expectations. An investor presentation said it expected revenue to be at or above $230m (Forsyth Barr is picking $240m). And it forecast full-year ebitda (earnings before interest, tax, depreciation and amortisation) margin of 'above 12%' versus Forsyth Barr's estimate of 14.3%. No profit/loss guidance was given. The firm does not pay a dividend. Ebitda increased by 5% in the first half to $13m. Net cash increased by 80.1% to $70.7m. Tariffs, green backlash 'Gentrack provides essential services with little direct impact from global tariff uncertainties,' the firm said in a market filing. 'In case of a global downturn, we do not expect the rate of transformation of utility companies to slow. However, passenger travel numbers could slow the rate of airport transformations.' It added, 'There is some pull back against net-zero targets which could potentially affect change programs for utilities. We do not see this as a current risk in our target utility markets of Europe, the Middle East and Asia.' In the US, the Trump administration has pushed a policy of what it calls 'energy realism' as it scales down or eliminates clean energy subsidies. The weakening of the New Zealand and Australian dollars had 'benefited Gentrack due to our global customer base and operating theatres'. In constant currency terms, Gentrack's net profit was $6.7m or 6.8% lower than the reported $7.2m and revenue 4.2% lower than the reported $112.0m. Chris Keall is an Auckland-based member of the Herald's business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: New Zealand companies face uncertainty amid US tariffs and global slowdown
Its economic forecast for New Zealand saw a reduction in real GDP growth in 2025 to 1.4%, down 0.5 percentage points. Growth for the Asia Pacific region – seen as strongly exposed to tariff shock – is expected to slow to around 3.9% and 4% in 2025 and 2026, respectively, down from 4.6% in 2024 and 4.4% in 2025, the IMF said. The uncertainty made forecasting difficult during the most recent reporting season, although company outlook statements did come in positive overall, according to Forsyth Barr's quantitative scorecard of the results. 'Trump tariffs and a major capital raise clouded the December earnings season, making it feel worse than it actually was,' Forsyth Barr analysts Aaron Ibbotson and Matthew Leach said in their research note. 'Our overall scorecard yielded a net negative result, but only modestly so. Cost-out programmes, demand as weak as expected and a surprising net positive outlook are our main takeaways. 'Earnings are still being downgraded as the recovery is pushed out at least another six months, but the pace of downgrades has slowed meaningfully,' they said. The February 2025 reporting season, dominated by the property and aged care sectors, showed earnings per share (EPS) growth was below expectations – weighed down by the likes of Fletcher Building and Meridian Energy reporting large losses compared with the previous corresponding period. Overall revenue growth was slightly better than expected though. Of the 31 NZX-listed companies that reported results, 11 reported ahead of Forsyth Barr's EPS expectations, four were in line and 16 were below. 'Downgrades continue to feature with net negative revisions across the board from revenue to the bottom line for both FY26 and FY27,' the analysts noted. The bright spot was the a2 Milk Company, which increased its first-half net profit by 7.6% to $91.7 million and recorded an 18.8% post result one-day share price gain. The biggest miss came from Spark NZ, which reported a 78% decrease in first-half net profit and a 17.8% post-result one-day share price decline. Forsyth Barr noted that both companies have a limited read across the New Zealand economy, whereas Fletcher was more hitched. 'We upgraded our estimates for cyclical bellwether Fletcher Building for the first time in over two years. It felt bleak but was in line with our low expectations.' One company result to look out for later this month is Mainfreight, a major logistics and transport company that is also seen as an economic bellwether. The company reports its first-half results on May 29. Earlier this month, Mainfreight said it expected its profit before tax and sales revenues for the March 2025 year to be above market consensus expectations of $375m and $5.1 billion, respectively. 'However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to US,' the company noted. The stock staged a decent recovery in the aftermath of the update. Geoff Zame of Craigs Investment Partners said in a daily newsletter that Mainfreight's update calmed market concerns about a tariff-induced slowdown in global growth impacting that company's earnings. At the macro level, uncertainty around tariffs remains a theme, Milford Asset Management portfolio manager Mark Riggall said in a recent note to clients. 'Just three short months ago, investor expectations were of ongoing US outperformance, both economically and from the stock market. Now, expectations are rapidly changing as fading US growth, policy headwinds (partly from tariffs), AI [artificial intelligence] fatigue and stronger stimulus impulses overseas (notably the German fiscal package) have upended the outlook for various asset markets. 'Looking ahead, uncertainty around tariffs and other government policy in the US lowers our conviction levels. But a policy-induced slowdown can also be mitigated by a policy reversal, an outcome that is likely at some point in the future.' Duncan Bridgeman is managing editor of NZME Business, including the Business Herald and BusinessDesk.
National Business Review
29-04-2025
- Business
- National Business Review
Auckland Airport faces heightened regulatory risk
Auckland Airport is facing more regulatory risk, according to Forsyth Barr, as the Government seeks submissions on competition settings at regulated airports through its review of the Commerce Act. The regulatory questions arise as the NZX and ASX-listed company has recently had to fend off
Otago Daily Times
28-04-2025
- Business
- Otago Daily Times
Exclusion big blow for Pacific Edge
Dunedin-based cancer diagnostic firm Pacific Edge has been dealt a severe financial blow after its key testing procedure was excluded from coverage by the United States Medicare federal health insurance scheme. The firm has been battling for more than a year to overturn a draft decision by a regional manager of the Medicare scheme to cease paying for the bladder cancer tests. However, the new coverage regime has now come into force and excluded Pacific Edge's test, which accounted for 60% of the company's income. "We are obviously disappointed we have been unable to maintain coverage of our tests in the short term," chief executive Peter Meintjes said. "This finalisation is a poor outcome for Medicare patients and urologists, as it removes coverage for guideline-recommended testing and followed a flawed process that failed to review the most current evidence." An attempt for a judicial review of the decision was unsuccessful, with the judge last week saying the court had no jurisdiction, and lobbying of new political appointees to various health authorities had come to nothing. The company's tests are still being used and paid for by private health insurance providers, and the United States Veterans Administration. Mr Meintjes, who was unavailable for further comment yesterday, said the company had resubmitted one of its tests for reconsideration, which was likely to take months, but had planned for the possibility of not getting coverage. "We will update shareholders as these plans are finalised, though our focus will remain on further evidence generation in parallel with the reconsideration pathway made available to all providers seeking Medicare coverage of their tests." Pacific Edge has already restructured to cut staff and costs to limit its cash burn, and previously said it would also look to diversify markets. In its quarterly update earlier this month, the company said total volumes for the year to the end of March 2025 (FY25) were down 11.5% to 28,894 tests from 32,633 in FY24, with the fall reflecting the reduction in the sales force compared to the prior financial year in response to the uncertainty over Medicare coverage of Cxbladder. In a note yesterday, Forsyth Barr analysts said Medicare represented about 60%-70% of Pacific Edge's revenue before the recent slowdown and was its largest market and key growth driver. A reconsideration request could reverse the decision but, if unsuccessful, Forsyth Barr expected ongoing clinical evidence generation investment "and a further operational battening down of the hatches". With net cash of about $NZ23 million at FY25 on Forsyth Barr's estimates and cash burn of about $2m a month, timelines were tight. — RNZ/APL
