Sharemarket falls, pulled down by Fisher & Paykel Healthcare

Monday, 12 April 2021

Fisher & Paykel Healthcare weakened, pulling down the wider sharemarket.

The sharemarket fell, weighed down by a decline in its biggest stock, Fisher & Paykel Healthcare.

The benchmark S&P/NZX 50 Index slipped 0.4 per cent, or 55.644 points, to 12,518.71 points on Monday.

Fisher & Paykel, which makes respiratory devices, fell 3.7 per cent to $32.17.

“Most of the fall is attributable to Fisher & Paykel Healthcare,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.

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“That’s the largest stock on the index, so it’s going to move the index by itself,” he said.

Davies said the company’s fortunes were influenced by the Covid-19 pandemic and had bounced around in recent times.

The most notable event of the day was the announcement that Synlait Milk chief executive Leon Clement would step down at the end of this month.

Synlait has been hurt by weaker sales from its biggest customer a2 Milk.

Clement, who has been in the role since September 2018, presided over the dairy company’s expansion with new plant, customers and acquisitions as it sought to diversify away from its largest customer, specialist milk marketer The a2 Milk Company which accounts for much of its earnings.

Synlait suffered over the past year after Covid-19 dented sales of a2 Milk’s products, and the departure of Clement was “another blow” for the company, Davies said.

“It’s been a tough job over the last 12 months,” he said.

Synlait’s former chief executive and co-founder John Penno will step into the role in May until a replacement is found. Penno is on Synlait’s board of directors.

Davies said he hoped Penno would be able to help the company “rediscover its mojo”.

“It’s a bit unfortunate that in the middle of an expansion, the market was in a tough state,” Davies said. “Things are really conspiring against them at the moment but they have got good quality assets so I’m sure we will see the other side of this one.

“They will need make sure they keep a tight watch on the purse strings until they get through it.”

Synlait dropped 2 per cent to $3.43, taking its decline over the past year to 53 per cent.

Summerset Group gained 0.9 per cent to $12 after the retirement village operator posted record village sales for a first quarter, continuing the strong trend post-lockdown.

The group settled 275 occupation right sales in the quarter to the end of March, a record for both new sales and resales and almost twice that of the same quarter a year ago.

“Aged care is still in high demand,” Davies said.

Harmoney Corp edged up 0.4 per cent to $2.30 after the online lender said loans to new customers rose 60 per cent to $44.1 million in its third quarter.

Scott Technology rose 5 per cent to $2.52. Its shares have gained 25 per cent so far this month after the automation and robotics company reported on Friday that it had turned to a profit in its first half, from a loss last year.

The trading was on low volume, with just 100 of the company’s shares trading hands.

Pacific Edge dropped 4.2 per cent to $1.15. The company’s chief executive David Darling said he would retire in a year’s time after 18 years in the role, but will continue as a consultant.

Davies said the shares had pulled back following a 21 per cent rally on Friday after the cancer diagnostics company announced its Cxbladder test had gained coverage from United Healthcare, the largest private health insurer in the United States.