Chris Lee & Partners Ltd

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

Market News 9 February 2026

Johnny Lee writes:

This week marks the beginning of February’s reporting season, which is shaping up to be an important one for New Zealand investors.

Skellerup is scheduled to be amongst the first and intends to publish its results this Thursday. Southport should be released on Friday.

Next week will see a number of our largest companies report, including A2 Milk, Contact Energy, Freightways, Fletcher Building, Spark, Sky City and Auckland Airport.

Spark’s result will be keenly anticipated. Spark has produced a string of poor results and enters reporting season with a share price close to 15-year lows. Expectations are not high. 

It will mark the first result since its SPK-30 strategy announcement last September. This new strategy would seek to refocus on core business – the provision of mobile services – and a shift away from non-core services.

Recent years saw Spark expand into (and exit out of) the likes of live sport, data centres and financing. Moving forward, the company expects a far simpler business.

This refocus is intended to produce “stable annuity-like returns… and growing dividends over time”. Shareholders and analysts alike will be keen to hear more about Spark’s plans to stabilise cash flow and provide greater predictability to future dividends going forward.

A key focus will be this dividend. The company has already flagged that future dividends will be tied to free cash flow, with 100% of this year’s free cash flow assigned to the dividend. In future years, the company has adopted a policy of 70% - 100% of free cash flow to fund the dividend, giving the company flexibility if opportunities arise, or expected future conditions necessitate the company holding on to its cash.

Another company in the spotlight is EBOS.

EBOS Group’s (EBO) share price has been heavily punished over the last six months and is our worst performing large cap over this timeframe. Despite this, it remains favoured by some analysts in the healthcare industry.

2025’s full year result surprised the market, with new CEO Adam Hall presenting the first full year result to include the loss of the Chemist Warehouse Australia contract.

2026 was framed as a year of transition rather than growth, notably one that would see the conclusion of both the distribution centre upgrades and the investment into this infrastructure. Specifically, EBOS expected a 30% reduction in capital expenditure following this completion. EBOS expects significant productivity benefits from these investments to ramp up in the years ahead.

More clarity on these benefits and internal expectations for 2027 will help stabilise the share price decline. At present, EBOS is trading like a yield stock, despite the investments it has made towards future growth. 

Reporting season starts on Thursday and will be a valuable opportunity for shareholders to evaluate the progress of their companies. Skellerup will open the season and help set the scene for the month ahead.

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One of the reasons why this reporting season is particularly interesting is due to the broader context of New Zealand’s economy.

The last few years have been marked by cautiousness and uncertainty, as listed companies grappled with a pandemic, geopolitical insecurity and an unpredictable interest rate environment.

Some recent data points to an economy beginning to rebound. Businesses remain confident in their short-term activity. Consumer confidence is now at its highest point in 5 years, and even dairy prices may be recovering.

However, inflation remains stubborn and unemployment has not yet stabilised. Last week’s data saw unemployment continue creeping modestly higher, largely due to an increase in the participation rate for the quarter. The employment rate actually rose alongside the unemployment rate, as more New Zealander’s sought work.

Maori and Pacifica continue to experience higher rates of unemployment, while the gap between men and women remains modest, at around 0.3%.

Positive outlooks from our corporate sector, particularly among the exporters, would provide a clearer picture. The likes of Fletcher Building, Freightways, Auckland Airport and Port of Tauranga will provide a broad spectrum of New Zealand’s economy, helping investors achieve a better understanding of what companies are seeing at the coal-face, and what investments they intend to make in response.

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David Colman writes:

Ryman Healthcare (RYM) released its refreshed strategy, new capital management framework and dividend policy at its Investor Day for investors and analysts on Tuesday.

RYM Chief Executive Officer Naomi James described the business as “uniquely placed with capacity and flexibility to meet the fastest growing areas of demand in care and assisted living.”

The retirement village owner and operator provides a continuum-of-care model offering residents a ‘home for life’ with the goal of keeping residents connected and supported as their needs change.

Plans for the business include continuing to evolve its offering and leverage its scale, seeking to provide more choice for residents with the intent of simultaneously improving long-term returns for its shareholders.

Ryman is targeting $150 million in sustainable cash flow improvement by Full Year 2029, ambitiously at the top end of the previously announced range. This is expected to be driven by growing occupancy rates, reset pricing and cost efficiencies.

A target of $500 million of cash released by Full Year 2029 has been set.

The funds are intended to come from new and paid out resale stock and at least $200 million from the sale of sites identified as land not required for immediate development.

Ryman’s landbank review concluded that six sites will be retained for potential development with a preference to Australia for greenfield investment (developing new facilities) with New Zealand representing stronger brownfield (expanding existing facilities) opportunities.

The refreshed strategy will focus on growing recurring earnings from Ryman’s $12 billion portfolio spread across New Zealand and Australia and positioning the business to return to value-creating portfolio growth.

Chair Dean Hamilton noted that the board’s top priority is to deliver a sustainable return on RYM’s existing asset base, and described the balance sheet reset as now complete, allowing the renewed pursuit of disciplined growth over time.

Full Year 2027 will focus on prioritising the best development opportunities across the portfolio.

The new capital management framework outlines a path to return to sustainable dividends in FY28 targeting a payout policy of 20-50% of cash flow from existing operations (CFEO) per share.

The company noted that the doubling of the 80+ population by 2050 will create scarcity in care and assisted living, increasing the value of Ryman’s existing capacity.

A material uplift in DMF (Deferred Management Fees) and weekly fees is expected as old contracts conclude and new ones are signed - approximately half of the portfolio is expected to be on new DMF terms by FY29.

Higher occupancy rates and a reset in care accommodation pricing are expected to drive a target uplift in aged care EBITDAF per bed from approximately $15,000 currently to $25,000 to $30,000 by FY29.

RYM’s FY26 ORA (Occupational Rights Agreements) sales guidance remains unchanged at 1,300 to 1,400 which remains below recent years (1,574 in FY24 and 1,523 in FY25).

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Briscoes Group (BGP) released its fourth quarter sales to 25 January 2026 which included record fourth quarter group sales of $256.6 million (up 4.58%) with Homeware up 3.45% and Sporting Goods up 6.46%.

The record quarter helped the company achieve record full-year Group sales of $798.8 million, up 0.93% - Homeware up 1.42%, Sporting Goods up 0.13%

The online business continued to improve with online sales at 20% of total Group sales for the first time, up from 19.69% last year.

Group Managing Director, Rod Duke described a highly competitive retail environment and that company initiatives such as promotions and trading opportunities helped improve margin and sales growth (+1.95%) and he expects the full year Group gross profit margin to be close to 39.20%. Margin decline was slowed for the second half to around 75 basis points versus 154 basis points for the first half.

The company expressed a commitment to rigorous management of inventory and costs with closing inventories to be at least $5 million below last year and total store and overhead costs increasing less than 1.5% over the last year

Despite persistent pressure on consumer sentiments and discretionary spending the company’s homeware and sporting goods segments returned positive sales growth for the full year even after earlier tracking below the prior year.

The group opened a new flagship Rebel X store at the end of November, following a refresh of its existing Panmure Rebel Sport site and noted that customer and supplier feedback has been overwhelmingly positive, and sales continued to build since opening.

Interest income for the year is expected to be $3.2 million less than last year due to a lower cash holding and lower interest rates.

The new Drury distribution centre remains on schedule and within budget.

The fourth quarter performance is viewed as encouraging with an economic recovery and consumer confidence crucial for the company to sustain momentum.

BGP has been an incredibly resilient retail leader in New Zealand and the expected full-year net profit after tax (NPAT) is to be in the range of $59 to $60 million

The Group is expected to report its full-year result, including announcement of final dividend, on Wednesday 11 March 2026.

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The Reserve Bank of Australia (RBA) hiked rates last week with a 25 basis points increase to the Australian OCR (Official Cash Rate) to 3.85%.

Inflationary pressure has increased recently with the Australian CPI (Consumer Price Index) rising since mid-2025 to 3.8%, and the RBA’s measure of underlying inflation creeping up to 3.3%, for the year to December.

The above data raised concerns that inflation could continue to climb away from the 2% to 3% target range pushing the RBA to act with its first OCR increase in over two years.

The RBNZ provides an update on the New Zealand OCR on Wednesday 18 February which will have to factor in the local CPI update in late January that at 3.1% is above the inflation target of 1% to 3%.

The update will be the first that the Reserve Bank Governor Dr Anna Bremen will have helped to prepare after being appointed in December last year.

If the RBNZ has similar inflation concerns to the RBA then the NZ OCR might be raised in the first half of this year (perhaps in April or May) noting the next CPI update is in late April. This would tend to affect short term rates.

Underlying bank rates (both short term, and longer term, swap rates) have been rising for months and the ANZ raised its 5-year term deposit rate to 4.50%p.a. last week which is a sign that lower borrowing rates are not expected in the longer term and that the yield curve is very much back to normal (lower rates for shorter terms versus higher rates for longer terms).

Notably, ANZ, as a major local AA- rated bank now offers a higher 5 year term deposit rate than lower rated (including BBB or less) deposit takers – this is perhaps a consequence of the newly established Deposit Compensation Scheme’s $100,000 limit per depositor enticing wealthy depositors to spread their deposits more broadly (reducing deposits held at ANZ and other AA- rated banks and increasing deposits with smaller, lower-rated banks and non-bank deposit takers, covered under the scheme).

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Travel

12 February – Lower Hutt – David Colman

18 February – Christchurch – Johnny 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

12 March – Nelson – Edward Lee

Johnny LeeChris Lee & Partners Limited

Market News 2 February 2026

Johnny Lee writes:

Mining stocks are experiencing significant volatility at the moment, both here and abroad, as commodity prices continue to break records each day. 

These records include both record highs and record declines in value, following Saturday’s crash.

Last week, gold touched $5,400 US dollars per Troy ounce, before closing the week at $4,800. A year ago, it was $2,850. Silver struck $117 US dollars per Troy ounce during the week, and closed at $85. A year ago, it was $27. Copper, lithium and platinum are also seeing volatility.

These commodity price fluctuations are flowing through to share prices.

BHP, which recently regained its position as Australia’s most valuable listed company, is up 28% in the last six months. Rio Tinto is up 30% in the same timeframe, Fortescue is up 18% and Lynas Rare Earths is up 47%.

Sandfire Resources – copper – up 82% over the last six months. PLS Group – formerly Pilbara, lithium – up 173% over the last six months. Zimplats – the ASX listed platinum operation in Zimbabwe - up 50%.

Locally, the NZX-listed Australian Resource fund (ASR) is enjoying a run, up 46% over the last six months. This fund is primarily exposed to BHP but also has meaningful positions in Northern Star and Evolution Mining, two Australian gold miners that have enjoyed enormous increases in value over the last few months.

Of course, our sharemarkets were closed during the sudden decline during Friday’s (US time) session. Expect to see more volatility this week. 

Alongside this has been the recent moves in the respective currencies. The Australian dollar is strengthening considerably, while the US dollar has weakened against virtually all major currencies. Uncertainty regarding the direction of the US geopolitical agenda does not help.

Differences in monetary policy are adding to this uncertainty. While the Australian Central Bank debates the possibility of rate hikes, there remain questions over the independence of the US Federal Reserve, and whether rates will be lowered, either for economic or political reasons. The recent decision by the Federal Reserve saw a 10-2 vote split, with the two dissenting Governors voting for a 25 point cut. 

The share price gains seen across the commodity space have been a boon for the Australian economy of late, with billions being added to market capitalisation. Superannuation accounts will be sharing in these gains, while the commodity price gains will also see royalty payments soar. 

However, the 25% fall in the silver price on Saturday should serve as a reminder to just how volatile these markets can be.

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One beneficiary from these recent commodity price movements should be the NZX. 

A number of companies have begun initiating the process to list on our exchange, giving them an avenue to access capital as their projects develop. Not all of these will progress to a sharemarket listing (or dual-listing), but any new listings would be most welcome, following the raft of departures in recent years.

Of course, mining stocks, particularly those in the early stages of exploration, require a high tolerance for risk from investors. Whether it is gold, silver or ilmenite, finding and identifying a reserve is only the first step – the consent and development process can take considerable time and capital. 

This can mean years before shareholders see an actual return. Not every investor is willing to wait years for an investment to come to fruition, particularly those who rely on their investments to provide the income to sustain their quality of life. 

The surge of interest among retail investors over the last few months, particularly from the Sharesies cohort, will give these companies confidence that New Zealand has a growing base of investors willing to consider investing in such companies. Investors are observing the benefits of diversifying portfolios to include commodities, particularly those with the advantage of time to allow these projects to develop.

Along the same logic, expect companies to begin shoring up balance sheets, conducting rights issues and placements while their share prices soar. This is happening virtually every day in Australia at the moment, particularly among the small to mid-cap space. It is far easier to tap shareholders for capital when those shareholders are feeling confident in their investment.

If the remarkable commodity price gains observed over the last few months are maintained, expect to see more interest in our capital markets, particularly from the mining sector. The growing interest in New Zealand’s mineral extraction sector is genuine, and efforts to diversify New Zealand’s industry appear to be working.

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Michael Hill International had an update to market last week, marking itself as an early litmus test for the retail sector heading into 2026. The update covered the six month period ending 28 December, 2025.

Expectations for the company were not high. Gold and silver prices are hitting record levels, and some had assumed the jewellery market would be quiet during these periods.

Instead, sales for the half year grew 3.1%, while earnings are expected to be in the range of $27 - $30 million, a double-digit increase from last year.

Once again, Canada and Australia are leading this growth, although New Zealand did see very modest year on year growth.

Three stores – two in New Zealand – were closed, while a new store was opened in Sydney. 

The other retail stocks – KMD Brands (Kathmandu), Warehouse, Briscoes, Hallenstein – will report over the next two months. These results should give some indication as to the confidence and financial health of the New Zealand consumer, 

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The Listed Property Trust sector had a busy week, with announcements across the sector.

Precinct Properties and Kiwi Property Group completed a trade last week, with Precinct agreeing to purchase Kiwi’s ASB North Wharf asset for $205 million.

Precinct conducted the trade through its Precinct Pacific Investment Limited Partnership vehicle, of which it owns 24.9%. The other partner is Singaporean sovereign wealth fund GIC.

The sale was completed at a modest discount to book value. The sale price was $205 million, compared to $212 million in Kiwi Property Group’s November financials.

For KPG, the sale is a continuation of its capital recycling programme, bringing down debt as it looks to focus on “potential acquisitions and development”. For Precinct, the transaction places a meaningful asset into its PPILP fund, which the company will manage going forward on behalf of its joint shareholder.

The other announcement came from Vital Healthcare, which announced a property revaluation. The unaudited valuation report came in $36 million higher.

Vital has seen a string of negative revaluations of late, although had stated in its August result that stabilisation of property valuations was expected in the near-term, as the property market recovers. This recent data point will provide some degree of confidence to the management team that the sector is halting its descent, and perhaps heading towards a stronger period.

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Travel

12 February – Lower Hutt – David Colman

18 February – Christchurch – Johnny Lee

3 March – Ashburton – Chris Lee

4 March – Timaru – Chris Lee

Chris Lee & Partners Limited