South's biotech sector thriving

Pacific Edge chief executive David Darling (left) senior scientist Justin Harvey (centre) and chairman Chris Swann are part of the team which helped the company rise in value last year. Photo by Peter McIntosh.
Pacific Edge chief executive David Darling (left) senior scientist Justin Harvey (centre) and chairman Chris Swann are part of the team which helped the company rise in value last year. Photo by Peter McIntosh.

The biotechnology sector was the leading performer in the Deloitte South Island Index in the three months ended December, with Dunedin-based Pacific Edge making a significant contribution to the index passing $10 billion in value for the first time.

The index, released this morning, showed South Island companies continued to perform well and the $10 billion barrier was broken for the first time since the index was established in 2007.

The index grew by $995.8 million, or 10%, in the quarter in terms of market capitalisation.

Deloitte corporate finance partner Scott McLay said the result ensured the index completed the 2013 with a ''perfect score of growth'' in all four quarters, up $3.6 billion, or 48.9%, in the year ending December.

The index's 10% quarterly growth placed it ahead of benchmark indices during the quarter to December 31.

In comparison, the Dow Jones and the ASX All Ordinaries achieved the next highest growth rates of 9.6% and 2.6% respectively.

The NZX-50 finished neutral over the same period.

''This dominance, combined with the index breaking the $10 billion barrier, clearly indicates a boom period for investor confidence in South Island listed companies.

''The positive trend was especially encouraging given the number of non-listed businesses struggling in post-earthquake Christchurch and the well-publicised recent losses of significant Dunedin employers,'' he said.

The standout performance of the quarter came from Pacific Edge, which increased its market cap by nearly 185% following the issuance of more than 37.8 million shares and the increase of its share probe by 80c, or 151%, to $1.33 a share.

Mr McLay said the phenomenal percentage growth of Pacific Edge saw the company almost triple in size during the quarter.

''The exceptional increase in the company's share price followed Pacific Edge's two announcements in October and it had signed agreements with FedMed and America's Choice Provider Network to provide 54 million Americans with access to Pacific Edge's Cxbladder - a cancer detection test.''

The quarterly result saw Pacific Edge leapfrog from 11th place on the index to sixth.

Dunedin-based Scott Technology's market cap reduced during the quarter by $12.4 million, continuing its gradual fall during 2013. As an exporter, the company's results were strongly affected by the exchange rate with the majority of Scott Technology's revenues (87%) coming from outside of New Zealand.

South Port, the Bluff-based port company, dropped by $8.1 million in market cap during the quarter with no ready explanation for the reversal in fortunes from its previous quarterly growth apart from a pattern of alternating up and down quarters for the past two and a-half years.

Silver Fern Farms, the Dunedin-based meat processor, continued its downward trend, decreasing $5 million (11.1%) in market capitalisation with the company not posting a positive quarter since March 31, 2012.

During the quarter, Silver Fern Farms reported a net operating loss after tax of $28.6 million for the 12 months ended September.

Wool Equities was another in the primary sector which saw its market cap fall.

The leading company in the sector for the quarter was Synlait Milk which gained 74c a share. Synlait announced yesterday it was increasing its forecast payout price from $8kg/ms to a range of $8.30-$8.40.

The South Island index's top performer for the quarter, in terms of dollar value of their market cap, was Ryman Healthcare.

Ryman's market cap increased by $450 million, or 12.9%, during the quarter on the back of an announcement of an underlying profit of $58.5 million for the first six months of the final year.

The profit was a new record for the company and 22% on the previous year.

It marked the ninth consecutive quarter the company had achieved growth, Mr McLay said.

The largest fall for the quarter came from EBOS Group, which suffered a reversal of its recent results, losing $51.9 million in market cap.

 


 Top 10

1: Ryman Healthcare, market cap $3.9 billion.

2: Ebos Group, market cap $1.43 billion.

3: Meridian Energy, market cap $1.3 billion.

4: Kathmandu Holdings, market cap $703.7 million.

5: Synlait Milk, market cap $576.6 million.

6: Pacific Edge, market cap $423.3 million.

7: Heartland NZ, market cap $333.7 million.

8: Skellerup Holdings, market cap $333.6 million.

9: Skyline Enterprises, market cap $332 million.

10: Lyttelton Port, market cap $307.8 million.


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