How are 5 NZX consumer stocks doing after NZ struck free trade deal with the UK?

Highlights

• NZ struck a free trade deal with the UK.
• The deal will eliminate tariffs for all NZ exports while giving an economic boost to the NZ GDP.
• Businesses and exporters are likely to benefit significantly due to decreased costs.

New Zealand PM Jacinda Ardern and Minister for Trade and Export Growth Damien O’Connor announced on Thursday that New Zealand and the UK had agreed to a Free Trade Agreement (FTA) that would fast-track NZ’s COVID-19 economic recovery. The text for the same is due to be finalised in the months ahead.

Britain was the seventh-largest trading partner of NZ before the start of the COVID-19 pandemic with the trade worth $6 billion between both the countries to March 2020, as per reports.

The agreement will eliminate most tariffs on exports and boost NZ’s GDP by nearly NZ$1 billion. The deal will also see significant increases in NZ’s beef and sheep meat export volumes with free market access after 15 years.

The contract will not only benefit NZ’s primary industries but also services as businesses wanting to access the UK government procurement market will have more opportunities. Environmentally, initiatives like commitments to take steps to remove fossil fuel subsidies and to prohibit fisheries subsidies under FTA will also help NZ.

On this backdrop, let’s cast a glance at how these 5 NZX consumer stocks are performing.

Image source: © 2021 Kalkine Media, Data source- EODHD/Others

Livestock Improvement Corporation (NZX:LIC)

NZ-based agri-tech and herd development co-operative, Livestock Corporation provided annual meeting results on 14 October.

DO READ: Which are 5 best NZX consumer stocks for the remaining 2021?

LIC had reported increased revenue, profit and a strong balance sheet in FY21 with no debt at the end of the year. The Group also informed recently that Melanie Tonkin had been authorised as the Returning Officer.

LIC ended the day flat at $1.22.

Synlait Milk Limited (NZX:SML, ASX:SM1)

Dairy processing and farming Company, Synlait, launched its own-branded first consumer foods product, Synlait Swappa Bottle, on 5 October, in its attempt to eliminate plastic waste.

DO READ: Which are 5 popular NZX food stocks to explore in October?

Synlait also informed Thursday that 110,471 performance share rights had lapsed with 330,550 remaining rights on issue by SML.

SML ended the day 0.52% in red to close at $3.8.

The a2 Milk Company Limited (NZX:ATM; ASX:A2M)

NZ-based dairy nutrition company a2 Milk is facing a class action filed by investors who held ATM’s shares on the ASX and the NZX between 19 August 2020 and 9 May 2021. The suit is related to ATM’s four earnings downgrades over previous financial year.

RELATED READ: a2 Milk (NZX:ATM): Why is it facing class action lawsuit?

The Company has responded that ATM had always complied with all disclosure requirements and will defend all legal proceedings.

ATM ended the day 2.6% in red to close at $7.48.

Scales Corporation Limited (NZX:SCL)

Agri-business company, Scales Corporation, appointed Geoff Smith as Chief Operations and Sustainability Officer on 14 October. Mr Smith is the head of NZ supply in Zespri and has extensive experience in agribusinesses.

He will begin his tenure in January 2022.

SCL ended the day 0.18% in green to close at $5.5.

New Zealand King Salmon Investment Limited (NZX:NZK)

New Zealand King Salmon, the world’s largest king Salmon producer, released its H1 FY22 results on 30 September. The Group faced challenging 6 months due to small fish size and compensating restrictions on harvest.

RELATED READ: Why to consider 3 NZX-listed dairy stocks in October 2021?

NZK faced losses in the first 4 months and was back to break-even in June and recorded $1.6-million proforma EBITDA in August. The Group is forecasting over 4K tonnes of harvest volumes in H2 of 2022.

NZK ended the day 1.37% in red to close at $1.44.

Bottom Line

The free trade agreement will remove tariffs for 97% of NZ product lines and all tariffs on the British goods that enter NZ.

As the agreement comes into action, tariff elimination will help NZ exporters save $37.8 million a year.