Market News - 22 June 2026

Johnny Lee writes:

Earnings Updates

While June is typically a quiet period for New Zealand equities, a number of companies have taken the opportunity to provide updates to their shareholders.

Wine company Delegat Group published a positive update to the market, lifting its guidance for the year ahead.

This included an increase in forecast net profit for the year, from a midpoint of $52.5 million to a new midpoint of $61 million.

This upgrade was driven by a combination of stronger sales, a weaker New Zealand dollar and a reduction in US tariffs.

The market responded very positively, with the share price climbing 15% shortly after the news. It remains down for the year, but the double-digit decline has at least ended, down only 9.5%. Listed peer Foley Wines also saw a brief rally, as sentiment for the sector improved.

Delegat’s full-year result from February highlighted modestly rising profits and a strong focus on reducing debt. This caution, through a difficult period for the wine industry and exporters in general, looks to be paying off as headwinds begin to ease.

Seeka Limited also updated its guidance, following the conclusion of the 2026 harvest.

Yields were slightly lower than last year, at 45.4 million trays compared with last year’s 47.1 million. The company highlighted that this year reflected a more typical result, with volumes consistent with historical levels.

Accordingly, the company is now anticipating a net profit in the range of $38 million to $42 million, a 15% decline from last year.

Seeka’s focus remains on automation, which it hopes will reduce many of the risks experienced over recent years. The company is also focused on continued balance sheet improvement, which has seen it almost eliminate its net debt.

The market was clearly expecting worse: the share price climbed following the announcement, trading near $5, up 6% for the year.

Fletcher Building provided a trading update, with the company expecting a similar result to last year, with earnings guidance of $375 million compared with $380 million last year.

The company did warn that elevated fuel costs, which have perhaps since moderated, had led to a string of cancelled projects, particularly in the commercial space. This was highlighted as the main risk to earnings guidance.

Fletcher remains focused on asset sales and debt repayment, with a total of $450 million of net cash proceeds expected by financial year-end.

The company also announced its intention to withdraw its credit rating, currently supplied by Moody’s Ratings. Its rating was Baa3, considered investment grade, but only just. Fletcher Building will continue to operate within the same metrics.

The cessation of an external credit rating is being driven by the change to its debt profile. Following its debt reductions, the company no longer sees enough value from an external rating agency such as Moody’s. Its next expected maturity on the listed market is the FBI210, which has an election date in March 2027.

The question for shareholders will instead centre on the resumption of dividends. Its half-year result had stated that a return to dividends was a medium-term goal, and an update from the company on the timing of this could come as early as August, when the company reports.

The strategy of portfolio simplification and asset divestment has progressed, and debt is nearing the company’s targets. Hopefully, shareholders will not have to wait much longer for the conversation to focus on shareholder returns.

SkyCity Entertainment Group

SkyCity Entertainment has finally resolved the ongoing dispute between its Adelaide asset and the South Australian gambling regulator, putting to bed a long-standing issue that had been shadowing the company.

The headline figure was an A$21 million fine, payable over three years. This figure was below some market expectations, which perhaps explains the resurgent share price following the announcement, which lifted from 51 cents to 58.5 cents.

Key terms included minor corporate restructuring for the Adelaide management, a limit on the use of cash for transactions above A$5,000, a “prohibition on junkets”, and the appointment of an independent compliance auditor.

Like Fletcher Building, SkyCity has been focused on asset divestment and debt reduction, as part of its own “simplification” journey, focused on its NZICC asset. The company had already flagged 2026 as a transitional year, looking beyond the year before returning to dividends.

With the Adelaide matter now settled and officially behind it, its next result in August will be able to focus on the future of the company, as its share price lingers in the doldrums.

David Colman writes:

GDP Update

Stats NZ released gross domestic product (GDP) data on Thursday for the year ended March 2026.

The data release is timely in that it covers a month that was influenced in part by higher fuel prices as a result of the US/Israel strikes on Iran, which commenced on 28 February.

By the time it is released, the Stats NZ data is relatively stale, but it provides confirmation that the New Zealand economy was continuing to grow in the first quarter of the year. It also confirms a trend of positive New Zealand GDP growth, which began in the July to September quarter last year after a painful period of contraction.

Economic growth is essential for a modern economy and, if another quarter of growth for the current quarter ending 30 June 2026 is somehow achieved against a backdrop of higher energy costs, it would mark the first time in over three years that New Zealand has recorded four consecutive quarters of GDP growth.

Nine out of 16 industries recorded an increase in economic activity in the March 2026 quarter, with manufacturing being the largest contributor to the overall increase.

The rural industry and tourism were also relatively strong, compared with weaker construction activity.

New Zealand’s exports in March 2026 reached NZ$7.94 billion, a record high that has already been surpassed, with April 2026 exports hitting $8.6 billion. This is at odds with the often gloomy picture painted by many media outlets.

Optimistically, if the delicate peace in the Middle East and a meaningful reduction in fuel costs are sustained, then New Zealand would be set up for a much better economic performance into 2027 and beyond.

Such conditions may attract more investment to Kiwi companies.

I am looking forward to Stats NZ’s plans to improve its services, which include more frequent data updates, with inflation data, the Consumer Price Index (CPI), to be released monthly instead of quarterly from 2027.

New monthly industry indicator releases are also planned for later in 2027.

An update on these long-awaited initiatives to align New Zealand’s macroeconomic statistics with globally accepted standards is expected in July.

Oceania Bond Offer

Oceania Healthcare has announced an issue of six-year fixed-rate, senior, secured bonds.

The interest rate has been set at a minimum of 5.50% per annum.

Oceania will also pay the transaction costs, meaning clients will not pay brokerage.

Oceania produced its full-year result in May, which saw record sales volume, a meaningful increase in net assets, and a significant reduction in net debt. Its debt now sits at 30.1%, at the bottom end of its target 30% to 35% range. Although the company is not currently paying dividends, it is targeting 2027 for a return to dividend payments.

An investor presentation and indicative terms can be found at the link below:https://www.chrislee.co.nz/uploads//currentinvestments/OCA030.pdf

Investors interested in a firm allocation should contact us no later than 10am on Thursday 25 June 2026 with their CSN and the amount they wish to invest.

Paraparaumu Seminar

The first of our seminars this year will be held at Southward Car Museum, Paraparaumu, on 7 July @ 10:30am. Please contact us via email if you would like to attend.

New Financial Adviser Position

We are currently looking to add an experienced Financial Adviser to the Chris Lee & Partners team.

This is a long-term role based in Paraparaumu, working closely with our long-standing clients throughout New Zealand.

If you are interested in learning more, please contact us confidentially at office@chrislee.co.nz.

Travel

24 June - Lower Hutt - David Colman26 June - Napier - Edward Lee

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