Business 12 Ashburton Guardian
www.guardianonline.co.nz
Thursday, February 22, 2018
Data plans increase Spark sales Spark New Zealand expects to reap more gains from its unlimited mobile data plans after the country’s biggest telecommunications company attracted customers and generated more revenue from those users. Auckland-based Spark’s mobile revenue rose 8.8 per cent to $635 million in the six months ended December 31, accounting for almost 35 per cent of the carrier’s revenue and almost twice the $341 million derived from broadband, its second-biggest earner. Mobile connections rose 3.6 per cent in the half to 2.44 million, putting it within spitting distance of Vodafone New Zealand’s 2.49 million connections, the first gain in two years. That was largely down to customers upgrading to highvalue unlimited data plans, and gains on its online-only Skinny Direct brand. Chief executive Simon Moutter told analysts on a conference call Spark’s unlimited mobile data plans were rolled out with the view to drive higher margins. “That might sound counterintuitive because the assumption is always there will be an enormous amount of data downloaded and
that would undermine the economics,” Moutter said. “Customers moving up to that price point will typically come from reasonably high usage already. Usage goes up a bit but not enormously.” He says the product is more about providing price certainty than encouraging costly data dumps.
Guardian Shares & Investments NEW ZEALAND SHARE MARKET
Source: NZX and Standard & Poors
1175 +246 5.0m 296.5 –1.5 2.1m 3020 +27 40.54 103.5 +0.5 279.2 125 +2 148.5 642 –8 559.0 317 – – 389 –5 562.9 838 +5 22.36 526 +1 1.3m 1735 +20 53.08 1288 –10 275.8 639 –47 14m 603 +3 409.6 740 – 287.7 233 –1 594.6 132 – 246.5 187 –3 376.2 309 –1 311.1 140 +1 81.95 229 +1 8.53 131 –0.5 378.3 2420 –16 134.2 325.5 –1.5 733.6 287 +2.5 2.2m 604 –10 82.40 85 –1 199.3 241 – 160.5 108 –3 112.8 501 +1 160.2 129.5 +2.5 989.7 164 –2 170.3 393 – 259.4 716 +2 67.31 1059 +1 152.5 765 –15 25.59 452 –2 115.3 283 +3 846.7 403 +5 1.3m 332 –13.5 3.8m 168 –2 138.2 582 +11 109.6 665 –40 936.6 604 +5 107.5 441 –3 323.4 515 –2 68.33 330 –2 1.2m 209.5 +0.5 125.5 3231 –12 11.93 700 +3 5.8m
S&P/NZX 50 Index Gross 8470 8380 8290 8200 8110 8020
21/2
Daily Volume move ’000s
16/2
1181 297 3075 103.5 125 646 – 396 838 530 1735 1288 650 605 748 233.5 133 190 311 141 235 132 2433 327.5 287.5 613 86 243 108 502 129.5 166 393 717 1060 775 455 285 403 338 169 585 665 607 441 516 335 212 3267 700
Last sale
9/2
1173 296.5 2995 103 124 640 – 388.5 834 526 1726 1287 635 602 739 233 132 187 309 140 227 131 2420 325.5 285.5 603 85 241 107 501 128 164 391 714 1051 757 449 280 397 332 168 582 660 604 438 515 329 209.5 3225 698
Sell price
2/2
a2 Milk Company ATM Air NZ AIR ANZ Banking Gr ANZ Argosy Prop ARG Arvida Gr ARV Auckland Intl Airpt AIA CBL Corp CBL Chorus CNU Comvita CVT Contact Energy CEN Ebos Gr EBO F&P Healthcare FPH Fletcher Building FBU Fonterra Share Fund FSF Freightways FRE Genesis Energy GNE Goodman Prop Tr GMT Heartland Bank HBL Infratil IFT Investore Property IPL Kathmandu Hldgs KMD Kiwi Property Gr KPG Mainfreight MFT Mercury NZ MCY Meridian Energy MEL Metlifecare MET Metro Perf Glass MPG NZ Refining NZR NZX NZX Port of Tauranga POT Precinct Properties PCT Prop for Industry PFI Pushpay Holdings PPH Restaurant Brands RBD Ryman Healthcare RYM Sanford SAN Scales Corp SCL Sky Network TV SKT Sky City SKC Spark SPK Stride Prop & Inv SPG Summerset Gr Hldgs SUM Synlait Milk SML Tourism Holdings THL Trade Me Gr TME TrustPower TPW Vector VCT Vital Hlth Prop Tr VHP Westpac Banking WBC Z Energy ZEL
Buy price
26/1
Company CODE
p S&P/NZX 50 Gross
8,200.27 +102.0 +1.26%
p S&P/NZX 20 index
5,506.3
capacity and coverage for its wireless broadband. That incorporates the roll-out of the 4.5G network around New Zealand, which is live on 38 sites in 30 locations. The company hasn’t offered any guidance on what it might cost to build a 5G network, with chief financial officer Dave Chambers yesterday saying “we’re doing some work around that at the
Scott Technology to buy Alvey Group
Compiled by
S&P/NZX 50 Index Gross constituents
That won’t last forever given the telecommunications sector is “an industry that commoditises and at some point, our competitors will move to closely match some of those products,” he said. Spark’s capital spending on mobile rose 20 per cent to $89 million in the half as it deploys its single radio access network and long-term evolution sites to boost
moment to shape up our view” and wants “clarity around what the standards will be and what the process around spectrum will be”. Spark scoffed at suggestions by fixed line operator Chorus last year that the government should sponsor the 5G network build in the same way it backed the ultrafast broadband network. The strength of the mobile earnings is making up for a tight broadband market, which Moutter again said was a “tough place to make any money” and where the price discounting has even drawn in Spark through its Skinny and Big Pipe brands. Against that backdrop, the country’s third-biggest internet service provider, Vocus New Zealand, is up for sale. “Consolidation is going to be part of improving the state of that market,” Moutter said. “We’d like to play a role in that but naturally others will also be thinking the same way. Vocus being potentially part of that consolidation move is in my view the logical result, given the stress in the market today.” Spark shares fell 2 per cent to $3.385, having dropped 4.8 per cent so far this year. – NZME
+93.95
+1.74%
p S&P/NZX All Gross
8,912.22 +104.83 +1.19%
p Rises 50 q Falls 64
WORLD MARKETS
p S&P/ASX 200 index
5,943.7
+2.8
+0.05%
At close of trading on Feb 21, 2018
q Dow Jones Indust.
Scott Technology has agreed to buy European industrial automation specialist Alvey Group for 12.1 million euro, speeding up its expansion drive and access to international markets. Dunedin-based Scott has completed due diligence and is finalising the sale and purchase agreement with a target acquisition date of April 4, it said in a statement. The purchase would be funded through its cash reserves, which stood at $26.7 million as of August 2017, and is expected to have a positive impact on earnings from completion, it said. Scott has been on the hunt for acquisitions, and last year bought Dunedin engineering firm DC Ross out of receivership to expand
its facilities, having had an influx of new capital from the investment by cornerstone shareholder, Brazilian meat processor JBS. The maker of robotic and automation systems said Alvey is a specialist in palletising, conveying and warehouse automation and its products and markets are complementary to its own. “Alvey brings with it a highcalibre workforce and expertise that will greatly add to our product range and software capabilities, while allowing Scott access to skills and technology faster than could be developed in-house,” Scott chair Stuart McLauchlan and chief executive Chris Hopkins said in a statement. “This is a key development that adds to our overall automation
capabilities, while helping fulfil our strategic expansion goal and accelerating our access to international markets.” Combining the two companies is estimated to lift Scott’s annual revenue to $190 million, from $133 million, based on historic figures for both companies, Scott said. The purchase price represents a multiple of 4.5 times earnings before interest, tax, depreciation and amortisation for Alvey’s March 2017 financial year. Alvey is owned by its managing director Maarten Van Leeuwen and other senior executives who will remain with the company after the takeover. Shares in Scott last traded at $3.22 and have gained 42 per cent in the past year. – NZME
24,964.8 –254.6 –1.01% At close of trading on Feb 20, 2018
q FTSE 100 index
7,246.8
–0.9
–0.01%
At close of trading on Feb 20, 2018
q Nikkei 225 index
21,918.7
–6.4
–0.03%
At close of trading on Feb 21, 2018
METAL PRICES
Source: interest.co.nz
q Gold
1,339.85
London – $US/ounce
–6.75
–0.50%
q Silver London – $US/ounce
16.57
–0.15
–0.90%
q Copper London – $US/tonne
7,027.0
–66.0
–0.93%
NZ DOLLAR
Source: BNZ
Country
As at 4pm Feb 21, 2018
Australia Canada China Euro Fiji Great Britain Japan Samoa South Africa Thailand United States
TT buy
0.9501 0.9478 4.962 0.6103 1.5422 0.5352 81.11 1.898 8.7533 23.51 0.7504
TT sell
0.9191 0.9134 4.3579 0.5843 1.4038 0.5168 77.74 1.6668 8.4342 22.39 0.724
Disclaimer: NZX and MetService have endeavoured to ensure the correctness of the information; neither NZX, MetService related companies, nor this newspaper, nor any of their respective employees or agents make any representation as to its accuracy or reliability nor will they, to the extent permitted by law, be liable for any loss arising in any way from, or in connection with, errors or omissions in any information provided (including responsibility to any person by reason of negligence). Please note: All products and services are subject to change without notice.
Fletcher shares at five year low Fletcher Building shares touched their lowest levels in more than five years yesterday after the company’s first-half results, which were clouded by losses at its Building + Interiors unit. It also showed soggy demand at its most profitable businesses over the next 12 months. The stock recently traded down 2 per cent at $6.72, having sunk as low as $6.50 after the results. The big one-time items including B+I operating losses of $631 million in the first half had been revealed in a profit warning last week that saw the resignation of chair Ralph Norris. Yesterday it reiterated guidance for full-year earnings excluding B+I of between $680m and $720m. Building products, Fletcher’s biggest business, lifted revenue
by 13 per cent to $1.25 billion although operating earnings fell 9 per cent to $118m. Distribution, which includes the Placemakers chain, lifted revenue by 7 per cent to $1.6b and earnings before interest, tax, depreciation and amortisation rose 8 per cent to $104m. In a presentation to investors, the company rated the 12-month market outlook for all of its businesses. The outlook was also low-wattage for its international division, which includes Laminex in the ANZ region, Formica in offshore markets and its steel roofing tile business. In assessing the market outlook it sees low growth in activity in low-density developments and zero growth in demand in high-
density properties. The loss was $273m in the six months ended December 31, from a profit of $176m a year earlier. Sales rose 6 per cent to $4.89b. The results show a loss of $322m on an operating earnings basis from a profit of $294m a year earlier. Chief executive Ross Taylor said the 12-month outlook didn’t indicate he was downbeat about Fletcher’s prospects. “I see strong growth opportunities within the business. Particular sectors might be challenged but other markets are picking up.” Taylor said in the statement to the NZX that outside of B+I, the broader Fletcher Building business “continues to perform to guidance”. – NZME