Broad range in company reports

Damian Foster
Damian Foster
Investors will be looking for some reassurance from some of New Zealand’s most prominent companies today, particularly from Fletcher Building, which will report its first-half result.

Today is not the busiest day for companies reporting their first-half earnings but with Fletcher, A2, Meridian Energy and Spark, a good cross-section of the economy will be under review.

Forsyth Barr broker Damian Foster said there had been enough excitement from Fletcher for one month. Beneath the already announced construction division losses, he expected a generally unexciting result.

Fletcher Living was expected to deliver a higher number of new homes, and modest volume and price growth more broadly, in part constrained by escalating cost inflation.

Fletcher was in a state of flux between the new chief executive starting in November, the latest round of construction losses and its reiteration of guidance.

Also it was facing renegotiations with lenders to be completed by the end of March, and a strategic review to be concluded in June.

"We do not expect much in the way of material news in its first-half result."

Spark was expected to continue its themes of recent years, with operating profit stability maintained through mobile and IT services growth, access charge savings from increased fixed wireless services and labour cost reductions offsetting continue falls in high-margin legacy voice and managed data, he said.

In recent years, Spark had benefited from supportive mobile trends, including a growing market and a move from prepaid to postpaid devices.

In the data available to date, competitors Vodafone and 2degrees had reported a softening in subscriber additions.

Spark’s simplification/cost reduction programme was a key determinant of medium earnings, Mr Foster said.

While Spark did not expect any material net benefits to flow until 2019, any commentary or evidence of progress would be of interest.

Meridian had earlier reported softer operating statistics. Its half-year result might reflect the lack of hydro generation.

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