Listed SI firms outperform NZX

ALAN WOOD
Last updated 13:30 23/07/2013

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The value of listed South Island companies continues to grow as the earthquake rebuild gets underway to help lead the country out of its recent economic doldrums, an accountancy firm says.

Financial services firm Deloitte compiles a South Island share index of 31 companies and says the companies' combined value has risen $601 million in value, or 9.8 per cent in market capitalisation, in the three months to June 30, 2013.

The latest Deloitte results see the index up $2.16 billion or 47.1 per cent during the year to June 30, 2013 with total market capitalisation now standing at $6.74b.

The index has fallen slightly in the month of June, which Deloitte attributed as possibly linked to the usual drop during the winter period.

The quarterly gain followed other increases in the December, September and June quarters.

The annual review of the quarterly Index report was released at a function in Christchurch today attended by Finance Minister Bill English and South Island business leaders.

Paul Munro, a partner with Deloitte, said 21 of the 31 companies in the index grew during the past 12 months.

The South Island Index's 47.1 per cent annual growth outperformed the NZX 50, which grew 30.6 per cent over the same period. The Dow Jones grew 15.8 per cent and the ASX All Ords added 15.5 per cent during the year to 30 June 2013.

The Deloitte index growth during the past 12 months was a reflection of investors' recognition of Southern resolve and ingenuity to overcome challenges and succeed in trying economic conditions following the quakes, Munro said.

"The resilience that South Island companies have shown over recent years, in adverse economic conditions, is remarkable,'' he said.

Investors ended up scrambling for shares in established companies like Ryman Healthcare, Kathmandu and Skyline Enterprises.

The economic buoyancy also created a positive environment for new capital raising as seen in the recent successful share issues for Moa Group, SLI Systems and Ebos Group, Munro added.

Ryman Healthcare was the standout performer for the year with an impressive $1.455 billion increase in market capitalisation on the back of its eleventh successive year of record profits.

Ebos Group retained its second ranked position on the Index after gaining $232.7 million in market capitalisation and Kathmandu Holdings increased its market capitalisation by $252.5m over the 12 months.

The largest fall in market capitalisation was Bathurst Resources, dropping $263.9m amidst multiple legal proceedings.

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Both Silver Fern Farms and NZ Windfarms also had a disappointing previous 12 months, dropping $35.1m and $23.9m respectively.

Every company in the biotechnology sector achieved positive results over the past year, but the vast majority of the sector's growth was due to the $111.0m gain in market capitalisation by Pacific Edge.

Every sector except energy & mining gained market capitalisation during the year to 30 June 2013.

"The investments in the Christchurch rebuild and the resilience of the South Island's primary sector continue to underpin the performance of the wider South Island economy, creating a solid platform for continued growth," Munro said.

In the next 12 months the index would likely see the additions of Synlait Milk and Meridian Energy with their scheduled listings on the NZX.

Synlait Milk, with an approximate market capitalisation of $322m, would join the index in fifth place while Meridian Energy, with an expected market capitalisation of more than $5 billion, would be the largest company on the index once listed, Munro added. 

- BusinessDay.co.nz

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