Synlait a standout as Deloitte South Island index gains $1.34b

Synlait made a 124% gain of $657.8 million in share value, totalling $1.18 billion market...
Synlait made a 124% gain of $657.8 million in share value, totalling $1.18 billion market capitalisation; pictured, the milk and dairy goods manufacturer’s dairy factory at Dunsandel. Photo: supplied
The Deloitte South Island index of companies has gained $1.34 billion in market capitalisation for the year to September, reporting a record $19.58 billion for the 31 companies since the index began in 2008.

Sixteen of the 31 companies tracked grew their capitalisation during the past 12 months, with milk and dairy goods manufacturer Synlait Milk reaching $1.18billion, Deloitte corporate finance partner Scott McClay said.

The index tracks the  share prices of 31 companies whose operations include widespread exposure in the South Island.

"The outstanding performer over the past 12 months was Synlait Milk with a remarkable increase of $657.8 million, or 124% in market capitalisation," Mr McClay said.

In the top five by value, Meridian Energy gained $627.9 million, or 9.4%, to hit a market capitalisation of $7.29 billion, and Ryman Healthcare and Ebos Group declined in valuation but remained second and third respectively.

Ryman was down by $180 million to $4.63 billion and Ebos was down $250.6 million to $2.61 billion.In fourth place was Synlait, followed by Heartland Bank, which gained 30.6% to hit a market capitalisation of $948.9 million.

Other companies with more significant South Island holdings included Skyline Enterprises, sixth and down 5.4% to $805.2million; PGG Wrightson, ninth and up 9.4% to $437.8 million; and Scott Technology, 13th and up 44.9% at $229.3 million. Silver Fern Farms  shed 49.5% market capitalisation, ranked 19th  at $55.2 million, Blis Technologies was 21st, down 42% at $32.1 million and Blue Sky Meats gained 42%, rising to 24th with $21.3 million.

Mr McClay said on a quarterly basis, the index rose by 3.9%, or $787 million, underpinned by the primary and property sectors, which gained, respectively,  $489.4million and $449.9 million.

"The top performers in dollar terms in the quarter include Ryman, up $490 million, Synlait up $428.3 million, Kathmandu up $68million, Scales Corp up $54.7million and Heartland Bank up $30million," Mr McClay said.

On the question of outlook, Mr McClay said the past year had seen a shift from the political status quo globally, citing Donald Trump’s election as US president and the United Kingdom’s leaving the European Union.

"For New Zealand businesses it can be particularly worrisome as a lot of these events are taking place in some of our major trading partners," he said.

However, he said South Island companies had in the past been able to take advantage during volatile times to outperform the market. In the bottom five, Energy Mad was 31st, valued at $300,000 after shedding 90% of its value in the face of restructuring and its re-focus on Australian LED light-bulb sales.

In 30th place, Window Technology made a 25% gain to hit $500,000, Aorere Resources was 29th on $1.5 million and Connexionz was unchanged with $2.7 million capitalisation.

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