Market News 24 November 2025

Johnny Lee writes:

Infratil has published its first half results, with earnings up 7 percent for the period.

The announcement offers a glimpse into the Infratil of tomorrow and the shape its portfolio intends to take over the coming years.

Earnings were generated across the portfolio. One NZ (formerly Vodafone) and CDC were the main contributors. Contact Energy will also be a major contributor in time, as dividends flow into Infratil’s results.

Capital expenditure for the half totalled $1.139 billion, primarily on data centres and Longroad’s United States based renewable energy rollout.

Asset sales continue. Infratil now has sale agreements for RetireAustralia, Fortysouth (the mobile tower business) and a legacy property asset. It is also evaluating its holding in Australian radiography business Qscan.

Should these assets leave the portfolio, the remaining investments ordered by valuation would be CDC, One NZ, Longroad, Wellington Airport, Contact Energy, Kao Data, RHC NZ (radiology), Gurin, Galileo, Clearvision and Mint.

CDC remains the dominant force. The data centre business is on track to double earnings from 2025 to 2027, with demand well ahead of supply.

The Contact Energy stake will be one to watch. Infratil noted that the 14.3 percent holding in a publicly listed company has future optionality. If Infratil wished to reduce or increase the holding in coming years, the transparency and liquidity of a listed asset make either path easier.

AI remains central to future prospects. If global AI investment continues, data centre demand and electricity demand rise with it, placing both Longroad and CDC in a favourable position.

Despite this, the market reaction was poor. Infratil’s share price has fallen about 10 percent since the announcement, equivalent to more than a billion dollars of market capitalisation.

The announcement served as both a progress update and a signal of its divestment strategy. FortySouth is already identified for sale and Qscan may soon follow. The business will be anchored around three core pillars CDC, One NZ and Longroad. Contact Energy provides optionality through its scale, earnings and liquidity.

Infratil declared a 9.25 cent dividend, payable on the 16th.

Mainfreight has also released its results.

The result was mixed, with parts of the business improving and one division struggling to turn a profit.

Revenue increased 2 percent, but profit fell 18 percent.

New Zealand and Australia were broadly in line with expectations. Both were weaker, but Mainfreight expects the second half to improve, especially in Australia.

The Americas business continues to lag. Revenue fell 10 percent and the division recorded a before tax loss of $2.3 million. Management is encouraging patience, pointing to long term opportunities and emphasising the importance of a United States presence within its global network.

Capital expenditure remains constrained, with $438 million allocated over the next two years. Most of this will be spent on new properties in Australia and New Zealand.

The dividend was maintained. The share price rose after the announcement, reflecting the very low expectations leading in. Mainfreight has been one of the weaker performers in 2025, falling 20 percent earlier in the year. It remains down, but now nearer 10 percent.

Mainfreight benefited greatly after COVID, when global logistics tightened and margins expanded. Now, attention is on the United States business and where global trade demand trends next.

Back in May, during its full year result, Mainfreight warned the current period would be difficult as global trade rules became increasingly unpredictable. The company is now forecasting a better six month period as it looks to a second half recovery.

Argosy’s half year result broadly met expectations and restored some confidence in the sustainability of its dividend.

Net tangible assets continue to recover. In May, Argosy reported an increase from $1.45 to $1.53. It has now risen again to $1.56. The share price continues to sit below this figure.

Importantly, the dividend payout ratio is moving back within the long term band. Last year’s dividend reached 103 percent of adjusted funds from operations, with Argosy choosing to look through a difficult period rather than reduce the dividend.

The ratio is still elevated at 97 percent, but management is confident it will fall towards the lower end of its 85 to 100 percent policy range. The dividend has remained at 6.65 cents per share for several years and is expected to continue at this level.

The balance sheet remains comfortable, with gearing at roughly 36 percent, similar to peers. Argosy has two listed bonds maturing next year and will be fortunate if it can refinance at similar rates. Much of its listed debt was issued during a period of very favourable interest rates.

Industrial assets again performed strongly. Rents are rising and supply remains tight. Vacancies remain low.

Office and Retail face ongoing challenges. Office requirements continue shifting as organisations adopt hybrid models. Modern green buildings, such as Argosy’s, remain popular. For Retail, businesses are consolidating into a smaller number of locations.

Overall, the outlook is positive and leasing enquiry is improving. The dividend has been maintained and appears sustainable following a difficult period for property stocks.

Goodman Property Trust reported its result the following day.

While Argosy has prioritised debt management and dividend stability, Goodman’s debt is low and dividends continue to rise. Goodman confirmed its dividend increase will continue into the second half, marking a 5 percent increase for the full year.

This was supported by a strong uplift in rental income, with core rental revenue increasing 5.2 percent.

Development continues at Mt Wellington Estate, Waitamokia and Penrose. All offer potential for further growth within the existing portfolio.

Penrose, in particular, provides an opportunity for Goodman to explore the data centre sector. Although early in the process, Goodman has committed $20 million to design and infrastructure work to build internal expertise.

Highbrook, managed and majority owned by Goodman, is now online and making a meaningful contribution.

Goodman is also considering adopting a stapled structure, similar to Precinct and Stride. This would allow continued growth of its investment arm while retaining PIE status on the property side. A proposal is expected to be put to investors next year.

Goodman’s financial position remains strong and management continues to see significant opportunities in both property ownership and property management. Data centres may become part of this future._ _ _ _ _ _ _ _ _ _Santana Minerals

Santana Minerals has announced that its Fast Track Approvals application has passed its first milestone, receiving confirmation from the Environmental Protection Authority that the application is complete.

The next step is for the Panel Convener to determine the makeup of the expert panel that will consider the application. Once the panel is appointed, a statutory decision date must be set. This process usually takes around six months.

Expert panels are independent decision making bodies formed for each Fast Track project. Panel members are required to collectively have expertise relevant to the approvals sought, including experience in environmental matters.

Subject to a positive outcome from the Fast Track process, construction of the project is expected to begin in mid 2026.

_ _ _ _ _ _ _ _ _ _

Kiwibank Tier 2 Note Offer

Kiwibank has announced that it is considering an offer of Tier 2 Notes, which will carry an investment grade credit rating.

The notes have a final maturity date of 12 March 2036 but are likely to be repaid at the first reset date on 12 March 2031. Similar notes from major banks, including Kiwibank, are typically repaid on the reset date.

Based on current conditions, we expect an interest rate of around 4.75 percent. Investors are unlikely to be charged brokerage, as Kiwibank is expected to cover these costs. Final details will be confirmed shortly.

If you would like to be added to the list for this offer, pending further details, please email us with your CSN and an indicative investment amount, and we will contact you once the details are confirmed.

We are expecting this issue to open on 1 December, with payment due around 10 December.

_ _ _ _ _ _ _ _ _ _ _

Travel

5 December – Christchurch – Chris Lee

8 December – Christchurch – Chris Lee

Chris Lee & Partners Ltd