Deloitte South Island Index continues to flourish in the spring quarter
South Island listed firms market capitalisation gains 5.8% in the quarter to 30 September 2016
The Deloitte South Island Index continued to grow in the spring quarter of 2016, building on prior quarters’ strong performances.
South Island listed firms collectively increased their market capitalisation by $1,066.4 million (5.8%) in the quarter ended 30 September 2016.
Scott McClay, a corporate finance partner in Deloitte’s Christchurch office, says that the Index’ overall solid performance during the quarter can be largely attributed to the positive performance of the medium to large sized companies on the Index.
“The key elements to this quarter’s results, in terms of percentage growth, lie with the performances of the ten largest companies on the Index, which collectively grew their market capitalisations by 5.7%. The ten smallest companies, on the other hand, dragged down the index by 6.6%” says Mr McClay.
“The top three companies on the index – Meridian Energy, Ryman Healthcare and EBOS Group – collectively grew their market capitalisation by a respectable $448.4 million (3.2%),” adds Mr McClay.
The Deloitte South Island Index’ 5.8% quarterly increase outpaced international benchmark indices with the S&P/NZX 50 Capital Index gaining 5.1%, the ASX All Ords growing 4.0% and the Dow Jones growing 2.1% during the quarter to 30 September 2016.
The Index’ top performer for the quarter, in terms of the dollar value of their market capitalisation, was EBOS Group which grew by $388.1 million (15.7%) during the quarter to 30 September 2016. This is on the back their announcement of full year results to 30 June 2016, which showed greater revenues for both sectors – Healthcare and Animal Care. Overall its reported Group revenues for the year of $7.1 billion were up 17.0% on the prior year while earnings before net finance costs, tax, depreciation and amortisation (EBITDA) grew by 14.6% to $225.5 million, reflecting ongoing focus on revenue growth and effective cost control.
The remaining top performers for the quarter to 30 September 2016 include Heartland Bank (up $164.5 million, 29.3%), Ryman Healthcare (up $150.0 million, 3.2%), Kathmandu Holdings (up $100.7 million, 32.7%) and PGG Wrightson (up $86.8 million, 27.7%).
The biggest declines in market capitalisation for the quarter came from Index heavyweight Meridian Energy, which fell $89.7 million (1.3%), followed by Pacific Edge down $31.5 million (15.2%), SLI Systems down $20.6 million (39.8%) and SeaDragon down $9.4 million (23.0%) during the quarter to 30 September 2016.
Five of the seven sectors posted positive movement in the quarter to 30 September 2016 with Manufacturing & Distribution (up 14.8%), Other (up 17.9%), Primary (up 12.6%), Property (up 3.1%) and Retail (up 32.0%) all achieving growth.
The other two sectors, Energy & Mining and Biotechnology, experienced declines for the quarter as they were pulled down due to one significant company in each of the respective sectors.
To see the full Deloitte South Island Index quarterly report, go to www.deloitte.com/nz/southislandindex.