Market News 25 May 2026

Johnny Lee writes:

Infratil

Infratil has made a second major announcement in as many weeks, informing the market that it had agreed to sell 5% of Contact Energy – roughly a third of its holding – in a bookbuild via Macquarie.

The agreed price was $9.25 per share.

This comes a week after announcing its largest ever data centre contract, which saw the share price of Infratil reach new records above $15 a share.

The selldown of its Contact Energy holding realised approximately $495 million, and “provides Infratil with additional flexibility to fund future growth opportunities.”

The remaining Contact Energy holding, approximately 9% of Contact, will be retained until “at least” August of this year.

The impact on the market was noticeable.

The market fell 1.2% almost immediately, with a number of large capitalisation stocks declining. Mercury, Meridian and Genesis all fell, as major investors shored up their books ahead of the placement. 

The prospect of a further sell-down in August will likely cast a shadow over Contact Energy for the next three months. This is, unfortunately, one of the drawbacks of companies having large shareholders. Auckland Airport shareholders will recall this well, when the airport share price struggled following ongoing and public discussion surrounding the possibility of the council reducing its stake in 2024.

Contact Energy shares fell after the announcement, following a brief period of trading halt. Realistically, 53 million shares is a significant amount of demand removed for the short-term, and the share price will take some time to find equilibrium.

Infratil has always prided itself on owning a diverse portfolio of assets, with a balance of profitable utilities (One NZ, Manawa, Wellington Airport) supporting its outperforming growth investments. This balance has changed over recent times, with Data Centres becoming an increasingly significant proportion of the portfolio.

Infratil reports its financial results to the market tomorrow. Investors will be hoping to receive some clarity on the use of the proceeds following the partial sell down of its Contact Energy shares, and the trajectory of the broader Infratil portfolio longer term.

Reporting Season

Reporting season has seen an excellent start so far, with a number of our mid-caps reporting meaningful growth across the board.

Fisher and Paykel Healthcare, Ryman, Infratil and Mainfreight report this week. These are the four of the largest companies reporting in the May season, and will be the most useful in determining the financial health of their respective industries.

Outside of these four, the season is showing a few common, positive trends.

Napier Port reported rising revenues and profits, and bumped up its dividend.

Revenue rose 8.8%, while underlying profit climbed 21.5%. Reported profit fell, although this included last year's Cyclone Gabrielle insurance claim.

The 5.25 cent dividend compared to 6.5 cents the year before. However, this 6.5 cents included a 2.5 cent special dividend. The 2.5 cent dividend last year was a one off, “arising from the finalisation of the Cyclone Gabrielle insurance claim."

Container volume increased, with strength seen in squash, onion and apple markets. Bulk cargo was more mixed, with fertiliser throughput rising, offsetting a decline in log volumes.

Cruise ship traffic fell sharply. Cruise revenue fell 21%, following a significant decline in cruise ship arrival numbers.

The outlook is positive. While the geopolitical situation is unpredictable, Napier Port notes that the pipfruit season is shaping up to be a good one, while demand for the region's produce remains strong. 

Overall, the result was positive and saw the share price climb following the announcement. 

Turners Automotive had a strong result too, delivering another record as the company moves from strength to strength. Normalised net profit, which excludes a goodwill write-down, climbed 18% to $45.6 million.

Both auto retail and the financing arm saw growth. Revenue is climbing, while the company continues to invest in organic growth, with three new branches opened in Christchurch.

The finance arm, in particular, was impressive. Revenue from the finance division climbed 13%.

Last years dividend of 9 cents was maintained, moving the full year dividend to 33 cents, compared to 29 cents in 2025.

The company reiterated its earlier forecast of $65 million net profit before tax by 2028. Indeed, the company is hoping to reach this figure by 2027. The next goal is $100 million by 2031.

The last two years has seen Turners grow significantly, with shareholders seeing tremendous gains. The company has a goal to continue growing, and while Turners notes trading conditions are difficult at present, it remains confident in its strategy.

My Food Bag also produced a strong result.

Revenue climbed 5%, net profit rose the same amount, net debt is almost eliminated at $1.9 million, and the dividend climbed from 0.85 cents to 1.15 cents.

Customer retention and spend per customer both climbed. 2026 was also the first year of the My Food Bag shop, allowing customers and non-customers alike the option of ordering one off meals, gifts and care packages.

Outlook remains strong, with a good start to FY27. While the company acknowledges that rising fuel costs have impacted margins, the growing suite of products, ranging from the lower cost offerings to the more niche products, is helping to increase overall retention.

The ongoing strategic review remains exactly that – ongoing. The company provided no hints as to where this may lead, other than to reiterate its view that the share price has consistently undervalued the company. 

While My Food Bag’s first two years as a listed company saw disastrous loss of wealth for shareholders, more recent years have seen it emerge as a consistently profitable, low-debt, cash generative business. Dividends have grown, and demand for its product has been resilient, despite a challenging economic environment. 

While the prospect of returning to its IPO price ($1.85) seems far-fetched for now, more recent shareholders will be pleased with the performance, with the share price up 50% over the last 12 months, and 80% over the last 24 months.

With net debt almost eliminated, the next decision for the company to make may be the best use of excess capital going forward. The strategic review may inform this decision.

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