Market News 23 March 2026

Johnny Lee writes:

WHILE the conflict in the Middle East continues to dominate headlines and drive markets, two market upgrades from two different companies have given investors more evidence of a market beginning to rebound.

Turners Automotive Group published an update to its earnings guidance last week, upgrading its estimated 5%, from “around $60 million” to “around $63 million”, following a strong summer.

Sales volumes have grown and Turners continues to win market share against its competitors. The company’s financing arm is also performing well, with its lending book growing strongly.

One of the most impressive aspects of Turners’ business has been its ability to perform well across both sides of the cycle. Combined with a very effective approach to marketing, the company shares are proving themselves as a resilient growth stock.

The escalating conflict abroad, and the impact this has had on the petrol price, may present an opportunity for the automobile industry, particularly among those consumers seeking to shield themselves from the economic impact of the rising oil price.

The company is hosting an Investor Day tomorrow (22 March), when it will outline its strategy and financial targets for the next five years.

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MEAL-KIT delivery company My Food Bag provided an update to the market last week, as the company faces rising costs and a particularly price-sensitive consumer.

Fortunately, these costs have been passed on and My Food Bag has improved its margin in the second half of the (financial) year. The company now forecasts revenue to increase 6% for the half, and net profit to land around $6.6 million, a modest increase from last year's $6.3 million.

While this is a far cry from 2022’s figure of $20 million, it will mark the second consecutive year of profit growth and may provide hope to shareholders that the company has found its footing.

One of the strategic initiatives pursued this year was to expand its offering, as consumer appetites continue to evolve. This includes a new higher protein option, and a “GLP-1 support range”.

2026 may be the final year of net debt reduction for My Food Bag, which stood at only $5.5 million in September. From there, the focus may turn to the future of the dividend, which currently sits around 10% gross.

The meal-kit sector continues to evolve globally, with My Food Bag’s main competitor – HelloFresh – refocusing its attention on larger markets and withdrawing from smaller markets. New Zealand’s market is dominated by these two, with a number of smaller participants seeking to grow their own market share.

For long-term investors, the update was a further, small step in the right direction. For more recent investors, the update will be encouraging and should continue to support a modest but gradually growing dividend.

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MY Food Bag’s commentary around GLP-1 and the distinct needs of such consumers is worth elaboration.

GLP-1 refers to glucagon-like peptide-1, a hormone that helps regulate blood sugar and appetite. In this context, GLP-1 refers to the increasingly popular medications that reduce appetite and are prescribed for managing Type 2 diabetes and assisting those looking to better control their weight. Within New Zealand, Wegovy is perhaps the best known of such medications.

In 2025, surveys revealed approximately 12% of US adults, or 30,000,000 Americans, use these medications. For context, in 2024 this figure was below 6%.

Women are significantly more likely to use them – 15% compared to 9% for men - and the 50- to 64-year-old cohort are the highest users, with 22% of Americans in this grouping currently using them. New innovations, patent expiries and changes in delivery from injection to pill form, are expected to fuel further growth.

Closer to home, 2% of Australian adults now use these medications, but discussions are currently underway to subsidise them. Even without subsidies, demand for GLP-1 is rising sharply in Australia.

For My Food Bag, the impact will be a consumer who prefers smaller meals, with a greater emphasis on nutritional content than satiety. This has led to the company engaging with nutritionists to design meals that focus on these elements.

However, the broader economic impact of this global trend is continually being explored. Studies in the US have analysed the impacts of these medications and provide a useful “canary” to our businesses, should New Zealand see a similar increase in demand to our OECD peers.

The obvious impact is on food consumption. Households with at least one GLP-1 user spend about 5% less on groceries and fast food. Alcohol consumption, which was already in decline, fell further among GLP-1 user groups.

The clothing industry is seeing an impact, with studies showing the demand profile for apparel shifting rapidly. Demand for smaller sized clothing is rising sharply, with an even sharper decline in demand for larger clothes. This has caught the clothing industry off guard, with the sudden shift in demand said to have caused billions in reduced profits for retailers.

Demand for supplements, such as protein, fibre and key vitamins is rising among GLP-1 users. As overall food consumption declines, nutritional deficiencies emerge, requiring consumers to supplement their diet to maintain good health.

Even air travel may benefit. Studies are now formally linking GLP-1 usage to reduced fuel consumption, which may lead to modest reductions in the cost of flying.

The longer-term effect on the healthcare industry is another to consider. While obesity in the US has gradually increased over the past few decades, more recent data suggests obesity rates, particularly from that 50 to 64 age group, are beginning to decline. The impact this has on the US healthcare system – ranging from cardiovascular health to sleep apnoea – remains to be fully seen. Negative long-term effects may emerge too.

This even has flow-on effects to the insurance industry. Munich Re, the world's largest reinsurance company, recently published a thought piece discussing the impacts observed during the past few years as GLP-1 use climbed, concluding that the health and life insurance industries face “a watershed moment” and will need to integrate GLP-1s into their underwriting programmes.

Locally, the likes of EBOS, My Food Bag, Fisher and Paykel Healthcare and Hallenstein Glasson will be well aware of the evolving trends from consumers. Investors should be too.  The challenge is determining whether this particular trend will be long-standing and represent a lasting shift in consumer behaviour, and which companies stand to benefit.

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Mercury Bond

Mercury Energy is offering a 7-year senior fixed rate bond. The offer is open now and is expected to close at 9am on 25 March 2026, with payment due by 31 March.

Mercury is one of New Zealand’s largest renewable electricity generators and retailers, is 51% owned by the New Zealand Government, and holds an investment grade credit rating of BBB+. 

The interest rate is expected to be in the range of 5.00% to 5.20% per annum.

Mercury will not be covering brokerage costs for this offer, so normal brokerage will apply.

If you would like a firm allocation, please contact us by 9am this Wednesday 25 March with your CSN and the number of bonds you wish to purchase.

Full details of the offer, including the indicative terms sheet and presentation, can be found on our website below:

https://www.chrislee.co.nz/uploads//currentinvestments/mcy080.pdf

Please note that this issue may be scaled.

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Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lower Hutt – David Colman

17 April – Napier – Johnny Lee

Chris Lee & Partners Ltd