WHS, FBU, SPK: Stocks to watch out for as business confidence dips

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WHS, FBU, SPK: Stocks to watch out for as business confidence dips

 WHS, FBU, SPK: Stocks to watch out for as business confidence dips
Image source: © Olivier26 | Megapixl.com

Highlights

  • ANZ released its Business Outlook Survey on Friday.
  • Business confidence fell 7 points to -63% in June.
  • Cost, labour shortages and inflationary pressures remain key concerns for firms.

The ANZ Business Outlook Survey is majorly conducted to understand firms’ views to understand their decision drivers and concerns and tracks how business views can impact the economy. The survey represents NZ’s business population in various diversified sectors like retail, agriculture, manufacturing, construction, etc.

ANZ released its business outlook survey on Thursday. The survey revealed that business confidence dropped 7 points to -63% in June, demonstrating a pessimistic outlook of firms for activity and profitability, majorly due to supply-side restrictions and cost burdens. Finding skilled labour, non-wage cost inflation, high rates of pay remain the top 3 concerns for businesses, as per the survey.

Investment intentions and residential construction expectations plunged in June. Overall, the expected outlook showed a drop amid supply chain issues, labour scarcity and an inflationary environment.

Here’s a look at the performance of 3 NZX stocks within diversified sectors.

© Rawpixelimages | Megapixl.com

 

Warehouse Group Limited (NZX:WHS)

NZ’s leading retailer Warehouse has a market cap of $1.16 billion. The Group’s total sales fell 2.5% to $771.6 million for the Q3 ended 1 May 2022. However, its online sales saw a rise of 7.4% with click and collect sales growing 17.7% to $36.9 million, representing 47.3% of the Group online sales.

WHS expects shipping schedules to stay hampered in Q4.

On 30 June, at the time of writing, WHS was trading at $3.35, up 0.9%.

 

Fletcher Building Limited (NZX:FBUASX:FBU)

Building products manufacturer Fletcher has a market cap of $3.9 billion. The Group recently held its investor day presentation. FBU expects the NZ plasterboard market to come back to equilibrium by October 2022 and revealed that the new WWB plant at Tauriko will open in 2023, which will add an additional 30% capacity to the NZ market.

The Group expects an EBIT of $750 million for FY22 and a target of over $100 million growth in FY23.

On 30 June, at the time of writing, FBU was trading at $5.09, up 0.59%.

 

Spark New Zealand Limited (NZX:SPKASX:SPK)

NZ-based telco Spark has a market cap of $9.03 billion. The Company registered strong results in H1 FY22. It has been looking for third-party capital for its subsidiary, Spark TowerCo, which will lead towers’ businesses in NZ with nearly 1,263 sites.

The Group was the quickest mobile provider by connections and revenue YOY in the first half of FY22. Spark also made some changes to its Board this month.

On 30 June, at the time of writing, SPK was trading at $4.83, up 1.68%.

 

Bottom Line

Firms continue to face supply chain problems, labour shortages and cost pressures amid a weak global economic outlook. These factors are leading firms to cut their investments and increase prices.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

 

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