Market News 16 February 2026

Johnny Lee writes:

Skellerup produced an impressive result last week, causing its share price to spike to a 4-year high. The half-year result saw net profit up 20% from last year, to a new record of $28.9 million. 

Revenues continue to grow, as the company ramps up to meet increasing demand, particularly from offshore. The profit growth allowed the company to both increase its dividend - 10 cents per share, up from 9 cents - and reduce net debt by around $3 million. Debt now sits around 5% of total assets, giving the company plenty of room to manoeuvre as needed.

Growth was seen across the entire business.

With regards to product line, dairy and water remain the primary sources of revenue, although the roofing and construction arms are growing strongly. This diversity of demand growth will be pleasing to shareholders, offering some protection to one-off shocks.

In terms of market, the US continues to be the main driver. US demand, particularly for potable and wastewater products, led the increase. Although tariffs did impact the result, Skellerup has largely taken these impediments in its stride. The New Zealand market was another strong performer, with our dairy industry fuelling much of this revenue growth.

This geographical split resulted in the dividend being partially imputed, with the dividend carrying only 40% imputation.

Guidance for the full year result was up, with the company now targeting a range of $57 to $62 million. Last year's figure was $54.5 million. 

Overall, the result should please shareholders. Revenue and profit are rising, which is flowing through to higher dividends and lower debt. Tariff impacts – so far – remain manageable, while Skellerup has developed a number of revenue streams and a broad range of international customers. 

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ANZ Bank released its first quarter trading update last week, which saw a significant increase in cash profit. Profit increased 75% to $1.94 billion for the quarter.

While there was modest revenue growth, the result was largely driven by the significant decline in costs, as the bank continues its “ANZ 2030 Strategy”. This strategy included a reduction of 3,500 jobs by September 2026 – with ANZ confirming that it has already reached 60% of this number already.

The strategy aims to further simplify the bank's offerings, exiting activities considered outside of the bank’s focus.

ANZ also gave an update regarding the Suncorp Bank acquisition, which was finalised back in July 2024. ANZ intends to fully migrate Suncorp Bank customers by June next year, integrating them into the existing ANZ infrastructure.

Both the loan book and deposit book saw modest growth, while the low interest rate environment saw bad debt provisions decline 39%.

ANZ’s share price rose sharply after the announcement, trading up 8%. Equity markets seem pleased with the direction of the bank, which continues to reach new record highs each day.

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Southport delivered another record result, reporting a 47% rise in net profit for the half year.

This was led by strong growth in cargo volumes. This was in turn driven by increased demand on both sides of the ledger – local demand for fertiliser and stock food saw imports jump, while woodchip products led an uptick in export throughput. Southport did note that log volumes have declined.

International factors continue to carry undue influence on the logistics sector. Southport highlighted the conflict in the Middle East in particular as causing disruptions to supply chains. 

The dividend was lifted from 7.5 cents per share to 8.5 cents per share, while net debt was reduced from $35 million to $29 million.

The outlook remains strong. A strong dairy sector is leading the company to forecast continued demand from the agricultural space, while opportunities in the energy and aquaculture sectors provide an avenue for growth.

The share price rallied after the announcement, up 2%, as the price approaches record highs. Our ports have struggled over the past few years, but Napier Port, Port of Tauranga and Southport have all enjoyed strong runs of late.

Port of Tauranga reports on the 27th, while Napier Port reports in May.

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A rare event occurred last week in international bond markets, perhaps highlighting the confidence (or madness) of certain investor groups at the moment.

Alphabet, the parent company of Google, issued a 100-year bond, maturing in 2126. The bond was priced at 6.05% and was denominated in sterling. Alphabet raised a billion on these terms, although the offer was almost ten times oversubscribed. 

100-year bonds – also called century bonds – are rare from listed corporates. Very few companies inspire the necessary confidence from investors that their business model will endure such a long period of time, and studies show very few companies make it to their centenary. 

Indeed, a look across US markets shows just how rare this is. When the Dow Jones expanded to 30 companies back in 1928, it included names like Nash Motors and Victor Talking Machine Company. Today, of course, the Dow is heavily tilted towards technology stocks like Apple, Nvidia and Microsoft.

Century bonds are not always successful. JC Penney issued century bonds in 1997, before filing for bankruptcy 23 years into the term. Exactly what Google – or indeed the world – looks like in 2126 is totally unknown. 

These bonds tend to raise money from very long-term investors, rather than traders. This includes insurance companies and pension funds, looking to match assets to their long-term liabilities. Some also use these products for estate management, as a means of transferring wealth across generations.

For Alphabet, the debt raised forms part of its plan to spend up to $185 billion US dollars – more than New Zealand’s GDP – in capital expenditure this year alone. This money would fund investment into AI capacity, including new data centres.

This investor enthusiasm towards data centres, and the infrastructure supporting that sector, is driving much of the value gains seen across equity markets of late. However, bond investors also seem happy to commit long-term to the thesis, as the world continues to pour billions and billions into digital infrastructure.

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Travel

18 February – Christchurch – Johnny Lee

23 February (pm) – Auckland (Takapuna) – Chris Lee

24 February – Auckland (Ellerslie) – Chris Lee

2 March – Christchurch – Chris Lee

3 March (am) – Christchurch – Chris Lee

3 March (pm) – Ashburton – Chris Lee

4 March – Timaru – Chris Lee

6 March – Wanaka – Chris Lee

Johnny Lee

Chris Lee & Partners