3 stocks to explore as business confidence lifts

Highlights

• NZ’s business confidence improved by 9 points in August, as per the ANZ Business Outlook survey.
• The lift in the mood was majorly in the agriculture, services and manufacturing firms.
• Inflation pressures were intense with risks inclined towards the RBNZ continuing with OCR hikes in 2023.

NZ’s business confidence improved by 9 points in August to -48 despite intense inflationary pressures, as per the ANZ business confidence survey released on Wednesday.

The lift in the mood was majorly in the manufacturing, agriculture and services firms, but retail firms stayed pessimistic. There was a significant jump in the construction sector, but the overall confidence stayed low. Moreover, there was a slight recovery in activity indicators, which included export intentions, own activity, inventory intentions, etc.

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ANZ chief economist Sharon Zollner stated that inflation pressures stayed intense with inflation expectations largely unmoved at their heights.

Amid this background, let’s look at how these 3 NZX stocks are doing.

Warehouse Group Limited (NZX:WHS)

A leading retailer in NZ, Warehouse Group, has a market cap of NZ$1.14 billion.

Group sales witnessed a fall of 2.5% for the 13 weeks to 1 May 2022 and online sales rose 7.4% to NZ$86.6 million in Q3 FY22 compared to Q3 FY21. WHS expects to witness continued supply chain challenges, high shipping costs and increased time for the products to reach shelves.

The Group also appointed Caroline Rainsford for the role of Director on 30 August.

WHS ended the day 1.53% in the green to close at NZ$0.133.

Fletcher Building Limited (NZX:FBU; ASX:FBU)

A company that manufactures building products and is a home builder, Fletcher, has a market cap of NZ$4.3 billion.

The Group delivered a 5% increase in revenue to NZ$8.4 billion and a 42% rise in NPAT to NZ$432 million in FY22. FBU will pay a final dividend of 22cps on 6 October 2022. The Group also completed its share buyback programme of NZ$274 million.

FBU expects to witness growth in profits in FY23 and it remains in a strong financial position.

FBU ended the day 0.34% in the red to close at NZ$5.78.

Kiwi Property Group Limited (NZX:KPG)

One of the largest listed property companies on the NZX, Kiwi Property, has a market cap of NZ$1.58 billion. The Group notified last month that its Chief Financial Officer Gavin Parker had resigned and decided to remain with the company until the release of interim results at the end of November.

KPG will pay a cash dividend of 1.425cps for Q1 FY23 on 21 September. The Group will also hold its investor day on 6 September 2022.

KPG ended the day 0.98% in the red to close at NZ$1.01.

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