The New Zealand sharemarket retreated nearly 1% following record highs earlier in the week, despite a robust interim performance from retirement village operator Summerset, a company in a sector that has faced notable challenges.
The S&P/NZX 50 Index closed at 13,880.05 on Friday, down 133.16 points or 0.95%. This followed a record close of 14,013.21 points on Thursday. Market activity showed a turnover of 47.14 million shares valued at NZ$176.49 million, with 62 stocks gaining and 73 declining on the main board.
Investment specialist Greg Smith attributed the market’s decline mainly to weakness in several blue-chip stocks, with investors adopting a cautious stance ahead of this week’s Jackson Hole Economic Policy Symposium, where US Federal Reserve Chair Kevin Warsh is scheduled to deliver a keynote address.
On the international front, semiconductor company Nvidia provided positive momentum for global markets, particularly in artificial intelligence (AI) sectors. The firm reported a second-quarter revenue of US$96.22 billion, more than doubling year-on-year and surpassing Wall Street expectations of US$92.17 billion. Net income also more than doubled to US$53.95 billion. Nvidia projected third-quarter revenue of approximately US$108 billion, signaling continued strong demand for AI technology. The company’s share price rose nearly 10% in after-hours trading, while major US indices remained relatively flat during the day.
Locally, Summerset’s shares jumped 9.02% to close at NZ$8.58 following its announcement of a 15.7% increase in revenue to NZ$200.25 million and a 91.7% rise in net profit to NZ$171.44 million for the six months ending June. The company reported delivering 481 new homes across Australia and New Zealand, with sales increasing 17% to 813 units. Summerset also declared an interim dividend of 3.8 cents per share payable on September 23. The company outlined targets to reduce net debt below NZ$1.9 billion by the end of 2027, achieve a gearing ratio of 33%, and generate cash flow from existing operations between NZ$70 million and NZ$90 million. Smith noted that Summerset’s results reflected a strategic shift from aggressive growth to reinforcing the balance sheet and managing unsold inventory, a move welcomed by investors.
Other retirement village operators also saw gains, with Ryman Healthcare up 2.4% to NZ$2.13 and Oceania rising slightly to 81 cents. However, both Summerset and Ryman remain below their year-start prices.
In contrast, several major stocks experienced declines: Fisher & Paykel Healthcare fell 46 cents to NZ$44.20; a2 Milk dropped 3.35% to NZ$8.36; Ebos Group declined 26.5 cents to NZ$21.17; and Auckland International Airport decreased 13 cents to NZ$8.57. Energy companies also saw lower prices, including Meridian Energy, down 2.73% to NZ$5.35, and Mercury, down 12 cents to NZ$6.90.
Genesis Energy reported mixed results with annual revenue falling 23% to NZ$2.831 billion and net profit down 50% to NZ$84.5 million, primarily due to lower wholesale electricity prices. However, operating earnings before interest, tax, depreciation, amortisation, and fair value adjustments (EBITDAF) increased 11% to NZ$522 million, supported by a gross margin improvement of 10% to NZ$949 million. The company announced a final dividend of 7.58 cents per share payable on October 9 and forecasts flat EBITDAF for the fiscal year 2027, with targeted investments of NZ$3 billion over the next five years in products, services, and generation capacity.
Other modest gainers included Gentrack, Delegat Group, and Eroad, while Winton Land’s shares fell sharply by 13.18% to NZ$1.12 following the resignation of its chief financial officer, Jean McMahon. Precinct Properties dropped 4.31% to NZ$1 after reporting a net loss of NZ$12.6 million for the year ending June but expects to pay a 6.75-cent cash dividend in 2027. NZ Rural Land reported improved revenue and net profit but has suspended full-year earnings guidance pending the outcome of the liquidation of Kiwi Crunch Farms, a tenant owing NZ$700,000 in rent.