Latest / Best of Business / Jeremy Hutton: Milford Asset Management expert on what the latest NZX results mean for the economy

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Jeremy Hutton: Milford Asset Management expert on what the latest NZX results mean for the economy · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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  Speaker 2: Now, we are obviously working our way through the NZX
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  Speaker 2: reporting season and Jeremy Hutt and Milford Asset Management's with me.
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  Speaker 1: Hi, Jeremy.
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  Speaker 3: Good evening, Heather.
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  Speaker 1: What's been the mood so far from the listed businesses?
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  Speaker 3: I'd say overall the results have been an improvement, and
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  Speaker 3: in general the numbers have been trending the right direction
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  Speaker 3: for a lot of New Zealand companies. But there's definitely
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  Speaker 3: some frustration out there, mainly on just that slowing momentum
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  Speaker 3: that the Iran and the fuel crisis situation has caused.
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  Speaker 3: And there were a few examples of businesses that had
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  Speaker 3: been reporting a pretty good run, getting that cyclical uptick,
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  Speaker 3: but then a noticeable drop-off occurred there. post that Iran
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  Speaker 3: situation in the second quarter. And a few examples of this,
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  Speaker 3: like in freightways, they're a courier transport business and generally
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  Speaker 3: a good barometer of the local economy. And their same
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  Speaker 3: customer volumes came back materially in that second quarter, which
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  Speaker 3: was in contrast to how they were going before that.
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  Speaker 3: As well, they had visitations and foot traffic down in
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  Speaker 3: that second quarter. And then Finally, Auckland Airport as well.
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  Speaker 3: I mean, airlines are in the thick of it, but
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  Speaker 3: their passengers were down a big step down in that
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  Speaker 3: second quarter too.
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  Speaker 1: Now, one space that is doing well is exporters.
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  Speaker 3: Yeah, I mean, this is pretty consistent with what we've
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  Speaker 3: been hearing in the local economy, this urban versus regional
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  Speaker 3: two-speed economy. And Another example of this is Scalarup. I mean,
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  Speaker 3: they export rubber components into industrial and agricultural systems, and
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  Speaker 3: they had some really good profit growth up 18% in
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  Speaker 3: that last period. Also today, we had Scales Corporation with
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  Speaker 3: some great export sales of apples and pet food. The
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  Speaker 3: share price reacted well to their beat and raise today,
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  Speaker 3: up over 5%. And then finally, Fisher & Paykel Healthcare,
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  Speaker 3: I mean, they're our largest listed company, and they had
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  Speaker 3: another great update last week, and they upgraded their profit guidance.
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  Speaker 3: So really, they're selling more medical devices to hospitals around
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  Speaker 3: the world. So great that another big exporter is doing well.
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  Speaker 2: Yeah, and there's a bit of a theme as well,
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  Speaker 2: isn't there, that some companies that we didn't love very
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  Speaker 2: much are making a bit of a comeback?
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  Speaker 3: Yeah, Fletcher Building in that bucket, and they had some
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  Speaker 3: positive commentary on the building material market. They've seen their
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  Speaker 3: volumes increasing pretty consistently, which is good for local construction activity.
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  Speaker 3: And interestingly for me in this space, I mean, this
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  Speaker 3: sector doesn't seem to be quite as impacted by that
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  Speaker 3: fuel situation like some of the other cyclical companies I
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  Speaker 3: mentioned earlier. And then Spark as well. I mean, they're
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  Speaker 3: actually leading the NZX so far this month. Their ship
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  Speaker 3: prices rallied strongly, up 13%. I mean, they had an
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  Speaker 3: inline result, but that very important dividend for next year,
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  Speaker 3: their guide was above expectations. So perhaps a good signal
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  Speaker 3: there that the business thinks the worst is behind them
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  Speaker 3: for Spark.
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  Speaker 1: Yeah, Jeremy, thanks very much. As always, good to talk
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  Speaker 1: to you. Jeremy Hutton, Milford Asset Management.