Market News 24 August 2026

Johnny Lee writes:

Reporting season is continuing to exceed expectations, as the index continues to flirt with the 14,000 mark.

The full year result from EBOS (EBO) was a positive one, with revenue climbing 10% and earnings up 5%. The dividend was maintained at 61.5 cents per share. This was in line with previous guidance.

EBOS story has long been one of tailwinds and trends: ageing populations, rising demand for healthcare services, new healthcare products and changing attitudes towards animals and pet ownership.

In the pharmacy space, revenue continues to climb, despite rising competition. Demand for GLP-1 (type 2 diabetes and obesity medication) products was again highlighted as a major driver, as well as productivity gains from its expanding distribution centres.

Hospital consumable demand also saw modest growth, as well as demand from aged-care customers.

Animal care continues to be a small but growing part of the EBOS base, with revenue climbing 35%. Part of this has been acquisition driven, but underlying growth has been strong as well.

The seemingly endless array of various speciality pet food products remains in high demand, including from its most recent acquisition, Paringa.

Paringa is a food delivery service for cats and dogs, currently based in the Sydney metropolitan area. It also services the Taronga Park zoo in Sydney.

The balance sheet remains in a healthy state. It is expected to improve further as the company migrates from a period of heavy investment in distribution centres, to more stable, long-term capital expenditure settings. 

Going forward, the company is forecasting continued growth, both organic growth from existing businesses, and inorganic from new acquisition opportunities.

The loss of the Chemist Warehouse contract was a heavy blow for EBOS and contributed to the significant decline in share price seen over the last twelve months. The company had highlighted that this year would be one of expenditure and minimal growth, leading to a generally depressed share price throughout the year.

Last week’s announcement led to a modest rebound in the share price of EBOS, up 9% on the day.

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Spark’s (SPK) announcement was perhaps one of the most anticipated this reporting season, as shareholders feared a continuation of the downward slide observed over the last two years.

Instead, Spark confirmed its previous guidance, including stable revenue, a modest earnings decline and a significant increase in free cash flow, the key metric used for dividend payments. The dividend was maintained at 8 cents, bringing the annual total to 16 cents, with partial imputation. Guidance for next year includes a range of 16 to 18 cents.

Spark’s story continues to be one of asset sales, cost management and a “focus on what we do best”. Indeed, the presentation once again mentioned that Spark’s renewed focus is on creating “stable, annuity-like returns” with “predictable free cash flow and growing dividends”. 

Asset sales were defined as “the logical next step” for Spark. Spark had already announced a strategic review of its Digital Services arm, and while the company reiterated that no outcome has been pre-determined, it seems clear that a fair price could mean further asset sales within the next year.

Further cost savings are expected in the years ahead. While labour reductions will of course see the most headlines, Spark is also planning for further cost reductions from the exit of legacy products, with both its voice product and its IT Service Management platform highlighted as opportunities for savings, as the product suite simplifies.

Core net debt fell 35% and is now at much healthier ratios. This has largely been achieved by the various asset sales seen over the last few years, including the data centre business sale confirmed in January.

Guidance for next year is for a similar level of earnings, a reduction in expenditure, and a modest increase in free cash flow.

Spark has struggled over the last two years, with the share price declining from over $4 a share to where it now sits around $2.15. The dividend has fallen, and the calculation used to determine this dividend has changed. 

Spark management and board now have the job of executing its SPK-30 strategy, meeting its guidance and presenting a clear, credible picture of what Spark will look like in the long-term. Judging by the early share price response, the full year result has restored some small degree of confidence from investors, ahead of a busy 2027 for the company.

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A number of our largest companies, including Mainfreight (MFT) and Port of Tauranga (POT), issued “Shareholder Register Release” notifications last week.

A Shareholder Register Release is used when a third party requests a list of all shareholders in a specific company. Both Mainfreight and Port of Tauranga requested permission from the regulator to withhold the information, and both were denied and were not able to refuse the request for the information.

The company requesting the information is Worthington Clark Pty Limited. It is not entirely clear why an Australian commercial asset recovery business would seek such a list, but New Zealand’s history with third party approaches has engendered a strong sense of caution from the financial advisory sector.

None will forget the “low-ball offers” of the 2010s, when certain groups acquired shareholder lists and wrote to investors, offering discounted or delayed payments for their shares, “earning” millions due to the gap between the value offered and the true value of the shares. Every financial advisor has heard horror stories of people signing away shares for pennies in the dollar, oblivious to the true value of their holdings.

Issues like unclaimed dividends are very straightforward problems to resolve in 2026. This is often caused by invalid bank details, perhaps coupled with a change of address. Unclear estate management can also cause issues with shareholdings. Our share registries, Computershare and MUFG, are well equipped to sort out such matters.

Any shareholders who receive requests from third parties, including Worthington Clark, should of course seek financial advice before signing any documentation. 

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Travel

Johnny Lee - Taupo - 1 September

Johnny Lee - Hamilton - 2 September

Johnny Lee - Tauranga - 3 September

Johnny Lee - Christchurch - 7 September (FULL)

Chris Lee & Partners Limited