Improvement in shareholder profits expected

A positive outlook for the coming reporting season should deliver improved profits and earnings per shares for investors, Forsyth Barr broker Andrew Rooney says.

From this week to the end of June, almost 40 listed companies are due to report.

While the recovering property sector companies will initially dominate the reporting, their earnings per share growth is expected to be flat to negative.

Mr Rooney said for May, with about 19 companies reporting, analysts were forecasting median sales increases of 8.7%, median earnings before interest and tax (ebit) up 10.4% and both normalised profit and earnings per share above 5% each.

However, while dividend growth from an aggregated level was expected to be above 9.5%, the median would be flat, at 0%.

The initial reporting period was dominated by six property companies reporting full-year 2014 results.

''The property sector is the most prominent to feature in the upcoming reporting season.''

While first-half 2014 trading for property companies had a very active period of acquisitions and new capital being raised, which boosted second-half earnings, the earnings per share growth was ''flat or negative for most'', given the share issuances and increased tax rates for many, Mr Rooney said.

The Kiwi Income Property Trust is expected to be the exception.

It is forecast to pay no tax, given the deductibility of a management contract payment, which should boost growth in earnings per share, he said.

''We expect evidence that the underlying property market continues to recover ... although this will be largely centred on Auckland-based assets,'' Mr Rooney said.

Large listed companies expected to report this week include Z Energy on Thursday, TrustPower on Friday, followed next week by Infratil, Goodman Property Trust and Ryman Healthcare.

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