Jeremy Hutton: Milford Asset Management Equities Analyst on the start of the NZX reporting season

The upcoming reporting season looks likely to reflect the tough times seen in the economy in the second half of last year, yet company 'outlook' statements may provide some optimism for the year ahead.

The season – comprising mostly second-half 2024 results – gets under way this week, and it's widely expected most major companies won't do too well.

Milford Asset Management's Jeremy Hutton explains further.

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Episode Transcript

Speaker 1 (00:00):
And Jeremy Hutton joins me from Milford Acid Management.

Speaker 2 (00:02):
Hello, Jeremy, good evening, Andrew.

Speaker 1 (00:05):
Reporting season kicked off this week with Vulcan Steel. So
what are we expecting for the financial results of inz
X companies? And I tell you we just had the
result from ASB which is a tick up and people
are saying, oh, that might be a suddenly a sprout
of green.

Speaker 2 (00:21):
Yeah, Vulcan Steel. They kicked off what will be a
very busy three week period for inzidex stock market analysts.
So there should be a lot of newsflow coming out
of New Zealand companies over the next few weeks. So
that'll be really interesting seeing how they're seeing the world
at the moment. Now. This result period does cover the
second half of twenty twenty four, which, unsurprisingly the market

(00:42):
has pretty low expectations for now. Vulcan Steel their results
confirmed some of those challenges we're expecting. As a reference
for listeners. Vulcan is a steel and aluminum distributor based
in New Zealand and Australia and their first half net
profit result was down six versus last year and this

(01:02):
is now down from around eighty five percent from the
peak times that they had just after COVID and is.

Speaker 1 (01:09):
And this is before the steel and ear the indium
tariffs that are coming in as well. But Vocus Steel
had some very interesting comments yesterday on their outlook for
twenty five.

Speaker 2 (01:18):
Yeah. One of the most interesting aspects in my view
of the reporting season is it is a really good
chance to hear from a variety of New Zealand businesses
on their view of the go forward. So what are
their expectations for twenty twenty five. And Vulcan Steel, as
we know, has been at the really pointy end of
a construction and building activity slowdown and this is a
really important part of the New Zealand economy. But they

(01:41):
finally had some more positive news. So the Vulcan management
team they were much much more optimistic on their view
of the next twelve months. They were talking to tangible
green shoots that they're seeing and better customer orders in
their forward pipeline as well. So finally some good news
for that sector.

Speaker 1 (01:58):
THEAK to Buildings next week, do you think they might
say something similar.

Speaker 2 (02:03):
Yeah, I'd say that Fletchers are unlikely to be as positive.
They have warm of the market up fairly well for
a tough six month period that's just been and the
business has been through a lot of change recently at
the senior leadership level, so a relatively new CEO, CFO
and the chair also just appointed fairly recently as well,
So they're all getting their feet under the table somewhat.

(02:25):
But the market won't have that much patience, you know.
They'll be expecting some pretty significant thinking from those senior
leaders on what the go ford plans for the business
are and further furthermore, the new Zealand Convention Center another
delay last week. It just highlights some of the challenges
that Fletcher's is continuing to work through.

Speaker 1 (02:45):
And we're expecting news out of the electricity gent tailors.

Speaker 2 (02:49):
Yeah, Contact Energy. They're kicking off the big electricity gent
tailors on Monday, and some of the gen tailor results
will be a little soft around the edges, you know,
some have been impacted by that very dry end to
the winter in twenty four some of them had to
buy some very expensive gas to keep the market supplied
with electricity. I also expect the gent tailors to announce

(03:13):
a range of renewable projects. It's very important that they
continue to build more generation for the country as it demands.
And then finally, any comments that they have on system
resilience or gas that will be followed very closely, especially
by politicians. They will not be wanting a repeat of
some of the winter stresses that we had last year.

Speaker 1 (03:35):
Is I've got some news on that after the news
which is up next year. Mehudton from Milford Asset Management.
I thank you so much for your time today. For
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