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Market News 24 November 2025

Johnny Lee writes:

Infratil has published its first half results, with earnings up 7 percent for the period.

The announcement offers a glimpse into the Infratil of tomorrow and the shape its portfolio intends to take over the coming years.

Earnings were generated across the portfolio. One NZ (formerly Vodafone) and CDC were the main contributors. Contact Energy will also be a major contributor in time, as dividends flow into Infratil’s results.

Capital expenditure for the half totalled $1.139 billion, primarily on data centres and Longroad’s United States based renewable energy rollout.

Asset sales continue. Infratil now has sale agreements for RetireAustralia, Fortysouth (the mobile tower business) and a legacy property asset. It is also evaluating its holding in Australian radiography business Qscan.

Should these assets leave the portfolio, the remaining investments ordered by valuation would be CDC, One NZ, Longroad, Wellington Airport, Contact Energy, Kao Data, RHC NZ (radiology), Gurin, Galileo, Clearvision and Mint.

CDC remains the dominant force. The data centre business is on track to double earnings from 2025 to 2027, with demand well ahead of supply.

The Contact Energy stake will be one to watch. Infratil noted that the 14.3 percent holding in a publicly listed company has future optionality. If Infratil wished to reduce or increase the holding in coming years, the transparency and liquidity of a listed asset make either path easier.

AI remains central to future prospects. If global AI investment continues, data centre demand and electricity demand rise with it, placing both Longroad and CDC in a favourable position.

Despite this, the market reaction was poor. Infratil’s share price has fallen about 10 percent since the announcement, equivalent to more than a billion dollars of market capitalisation.

The announcement served as both a progress update and a signal of its divestment strategy. FortySouth is already identified for sale and Qscan may soon follow. The business will be anchored around three core pillars CDC, One NZ and Longroad. Contact Energy provides optionality through its scale, earnings and liquidity.

Infratil declared a 9.25 cent dividend, payable on the 16th.

Mainfreight has also released its results.

The result was mixed, with parts of the business improving and one division struggling to turn a profit.

Revenue increased 2 percent, but profit fell 18 percent.

New Zealand and Australia were broadly in line with expectations. Both were weaker, but Mainfreight expects the second half to improve, especially in Australia.

The Americas business continues to lag. Revenue fell 10 percent and the division recorded a before tax loss of $2.3 million. Management is encouraging patience, pointing to long term opportunities and emphasising the importance of a United States presence within its global network.

Capital expenditure remains constrained, with $438 million allocated over the next two years. Most of this will be spent on new properties in Australia and New Zealand.

The dividend was maintained. The share price rose after the announcement, reflecting the very low expectations leading in. Mainfreight has been one of the weaker performers in 2025, falling 20 percent earlier in the year. It remains down, but now nearer 10 percent.

Mainfreight benefited greatly after COVID, when global logistics tightened and margins expanded. Now, attention is on the United States business and where global trade demand trends next.

Back in May, during its full year result, Mainfreight warned the current period would be difficult as global trade rules became increasingly unpredictable. The company is now forecasting a better six month period as it looks to a second half recovery.

Argosy’s half year result broadly met expectations and restored some confidence in the sustainability of its dividend.

Net tangible assets continue to recover. In May, Argosy reported an increase from $1.45 to $1.53. It has now risen again to $1.56. The share price continues to sit below this figure.

Importantly, the dividend payout ratio is moving back within the long term band. Last year’s dividend reached 103 percent of adjusted funds from operations, with Argosy choosing to look through a difficult period rather than reduce the dividend.

The ratio is still elevated at 97 percent, but management is confident it will fall towards the lower end of its 85 to 100 percent policy range. The dividend has remained at 6.65 cents per share for several years and is expected to continue at this level.

The balance sheet remains comfortable, with gearing at roughly 36 percent, similar to peers. Argosy has two listed bonds maturing next year and will be fortunate if it can refinance at similar rates. Much of its listed debt was issued during a period of very favourable interest rates.

Industrial assets again performed strongly. Rents are rising and supply remains tight. Vacancies remain low.

Office and Retail face ongoing challenges. Office requirements continue shifting as organisations adopt hybrid models. Modern green buildings, such as Argosy’s, remain popular. For Retail, businesses are consolidating into a smaller number of locations.

Overall, the outlook is positive and leasing enquiry is improving. The dividend has been maintained and appears sustainable following a difficult period for property stocks.

Goodman Property Trust reported its result the following day.

While Argosy has prioritised debt management and dividend stability, Goodman’s debt is low and dividends continue to rise. Goodman confirmed its dividend increase will continue into the second half, marking a 5 percent increase for the full year.

This was supported by a strong uplift in rental income, with core rental revenue increasing 5.2 percent.

Development continues at Mt Wellington Estate, Waitamokia and Penrose. All offer potential for further growth within the existing portfolio.

Penrose, in particular, provides an opportunity for Goodman to explore the data centre sector. Although early in the process, Goodman has committed $20 million to design and infrastructure work to build internal expertise.

Highbrook, managed and majority owned by Goodman, is now online and making a meaningful contribution.

Goodman is also considering adopting a stapled structure, similar to Precinct and Stride. This would allow continued growth of its investment arm while retaining PIE status on the property side. A proposal is expected to be put to investors next year.

Goodman’s financial position remains strong and management continues to see significant opportunities in both property ownership and property management. Data centres may become part of this future._ _ _ _ _ _ _ _ _ _Santana Minerals

Santana Minerals has announced that its Fast Track Approvals application has passed its first milestone, receiving confirmation from the Environmental Protection Authority that the application is complete.

The next step is for the Panel Convener to determine the makeup of the expert panel that will consider the application. Once the panel is appointed, a statutory decision date must be set. This process usually takes around six months.

Expert panels are independent decision making bodies formed for each Fast Track project. Panel members are required to collectively have expertise relevant to the approvals sought, including experience in environmental matters.

Subject to a positive outcome from the Fast Track process, construction of the project is expected to begin in mid 2026.

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Kiwibank Tier 2 Note Offer

Kiwibank has announced that it is considering an offer of Tier 2 Notes, which will carry an investment grade credit rating.

The notes have a final maturity date of 12 March 2036 but are likely to be repaid at the first reset date on 12 March 2031. Similar notes from major banks, including Kiwibank, are typically repaid on the reset date.

Based on current conditions, we expect an interest rate of around 4.75 percent. Investors are unlikely to be charged brokerage, as Kiwibank is expected to cover these costs. Final details will be confirmed shortly.

If you would like to be added to the list for this offer, pending further details, please email us with your CSN and an indicative investment amount, and we will contact you once the details are confirmed.

We are expecting this issue to open on 1 December, with payment due around 10 December.

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Travel

5 December – Christchurch – Chris Lee

8 December – Christchurch – Chris Lee

Chris Lee & Partners Ltd

Market News – 17 November 2025

Johnny Lee writes:

Vital Healthcare Property Trust has announced a capital raising as it looks to internalise its management contract.

Vital Healthcare owns and develops medical facilities across Australasia and is one of the last listed property trusts to be externally managed. The trust is managed by Northwest Healthcare Properties Management, based in Canada.

These types of deals can be difficult to assess from a shareholder’s perspective. In this case, Vital Healthcare unitholders will pay $214 million to Northwest to buy out the management contract and assume control of management themselves. The trust expects this to save about $21 million a year and generate tax benefits that reduce the net cost to around $177 million. Any remaining funds after payment to Northwest will be used to retire debt.

The deal was negotiated by the independent directors, as two members of the five-member board have connections to Northwest.

The internalisation will not be put to a shareholder vote. The independent directors stated that they needed to “act quickly”, without further explanation. Regardless, the transaction appears set to proceed. The $214 million will be funded by a $220 million capital raising, $190 million of which has already been completed through an institutional placement at $1.95 per unit.

The remaining $30 million will be raised through a Unit Purchase Plan (UPP) open to existing unitholders. The price will be the lesser of $1.95 or a 2.5% discount to the five-day average leading up to the close of the offer. These pricing mechanisms are designed to protect investors from market fluctuations during the offer period.

The UPP opened last Friday and closes on 28 November. Unitholders can apply for up to $50,000 of new units, with possible scaling based on existing holdings.

Northwest, which currently holds a large minority position, has agreed not to participate in the capital raising. This could signal an eventual exit, although the manager has agreed not to sell shares until after the February 2026 result, and not below a 10% shareholding until August 2026.

The agreement also allows Northwest to retain two board seats, which will reduce to zero if it sells out.

Vital also revealed discussions with Northwest about potentially selling one of its properties to Northwest in exchange for cancelling some of its shares — a proposal that would require careful management from both sides but could help remove the overhang of a large shareholder seeking to sell down.

The announcement of a discounted capital raising has sent Vital’s unit price lower, currently trading around $1.93. The move also pressured other listed property trusts as investors freed up capital to participate in the offer.

Typically, companies raise capital to fund growth or reduce debt. In this case, the proceeds will instead fund the internalisation, a structure Vital argues will produce long-term value by reducing external costs. The expected $21 million annual saving should prove accretive to earnings over time.

Applications for the Unit Purchase Plan can be made at www.vitalunitoffer.co.nz.

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A new listing has made its way to the NZX, with Locate Technologies planning to join the exchange on 3 December. Its code will be LOC.

Locate’s story is not an easy one to explain.

Locate, in principle, operates a route optimisation app called Locate2u, a document shredding business called Shred2u and an independent courier business called Zoom2u. All three are straightforward businesses to understand.

What complicates the company is its decision to use its cash reserves to buy Bitcoin, the well known cryptocurrency. Locate will be New Zealand’s first Listed Bitcoin Treasury Company.

Locate’s decision to move from the ASX to the NZX, via a Top Hat Restructure involving a Scheme of Arrangement, was prompted by the ASX cash box rule.

The cash box rule prohibits companies from listing, or remaining listed, when more than half of total assets are held in cash or cash like instruments. Bitcoin is treated as a cash like instrument under this rule.

Exceptions exist for miners, oil and gas explorers and certain financial institutions.

The NZX has no equivalent rule. Once Locate completes its listing, it will begin its Bitcoin treasury strategy. It already holds more than 12 Bitcoin, worth around $2 million NZD.

The company also operates an At The Money facility, contracting Novus Capital to sell new shares on market as required, effectively creating on market rights issues.

Locate Technologies will be a niche investment. Investors seeking Bitcoin exposure will likely continue to favour the Bitcoin ETF which is more straightforward. Locate will need to prove the value of its approach over time.

With the ASX signalling that cash boxes will not be allowed, the NZX has moved to win a new listing. Locate will be the third new listing for 2025.

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Comvita’s takeover offer by Scheme of Arrangement has failed.

The vote, held on Friday, did not secure the required 75 percent support.

The outcome will be contentious for several reasons.

Most notable is that the offer did receive majority support, with well over 50 percent of shares voted in favour, but the higher threshold proved too difficult to meet.

A similar situation occurred in 2023 with Pushpay, when 67 percent support was achieved for a $1.34 offer from Pegasus. Pushpay was ultimately acquired at $1.42 by the same group.

In the days before the Comvita vote, the board published daily voting updates. Many shareholders chose to sell their shares on market, often around 60 cents, rather than wait for the 80 cent offer to conclude.

The Board, including all independent directors, unanimously recommended acceptance. A majority of shareholders acted on that advice.

The offer price of 80 cents sat near the mid point of the independent valuation.

A complicating factor was commentary from Comvita’s founder Alan Bougen, who signalled prior to the vote that he was forming a syndicate to vote against the proposal and potentially make a counter offer. No such proposal has since appeared.

The rejection by a minority of shareholders will frustrate those who voted in favour. If no superior offer emerges, the company’s next step will be to work with its banks and major shareholders to secure funding and pursue a turnaround strategy.

Comvita was once valued in the hundreds of millions, with a double digit share price and strong investor enthusiasm. Today, the shares trade near 55 cents.

Hopefully, the rejection leads to a positive long term outcome.

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Kiwibank Tier 2 Note Offer

Kiwibank has announced that it is considering an offer of up to $200 million of Tier 2 Notes, which will carry an investment grade credit rating.

We are expecting this issue to open on 1 December, with payment due around 10 December.

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Travel

5 December – Christchurch – Chris Lee

8 December – Christchurch – Chris Lee

Chris Lee & Partners Ltd

Market News 10 November 2025

Johnny Lee writes:

Falling interest rates, combined with a distinct lack of new bond issues and poor secondary bond market liquidity, have shone a spotlight on dividends over the course of this year.

Yield shares have enjoyed a strong 2025. The banks are enjoying a significant lift in share price, most listed property stocks are up, the seaports have rallied, and even utilities like NZX Limited and Vector are up for the year.

In contrast, growth has struggled. Fisher and Paykel Healthcare, Infratil, Mainfreight and EBOS, four of our largest growth stocks, have struggled to attract short-term buying interest, with most investors focused on yield.

Investing for yield is not as straightforward as reading a list of dividend yields. Understanding a company’s historical approach to dividends, as well as their future outlook, is just as important.

Some companies are expected to cut dividends in the years ahead. This includes Spark – currently trading at a 14% yield – which has recently instituted a change in dividend policy which may see the dividend fall. Spark’s result announcement, due in February next year, will help inform the market in terms of dividend expectations going forward.

Others are currently enjoying bumper years, and paying bumper dividends. Tower Limited would be one example, having produced a 69% increase in underlying profit at its half year result in August. This has seen dividends more than double, and the share price climb 35% so far this year. Even at these levels, the yield on offer is nearly 10%, reflecting the inherently unpredictable nature of investing in the insurance sector, where natural disasters can have a disproportionate impact on profitability.

Scales is another company enjoying positive economic conditions. Scales has made no secret that it has experienced a strong 2025, and is looking forward to passing this on to shareholders with its next dividend payment in January.

Other companies are seeing investors return after a long period of underperformance. Sky Network Television has seen a remarkable rebound since COVID, with a strong share price supported by a rising dividend. The company continues to forecast further dividend growth, while already trading at a yield of 8.5%. However, SKT’s journey on the exchange has seen its fair share of ups and downs, and those enjoying these growing dividends at the moment will be aware of this history.

Many of our companies continue to consistently grow their dividends. Skellerup, Turner Automotive and Hallenstein Glasson are three in particular that have succeeded at growing shareholder returns. Although it is not a yield stock, Fisher and Paykel Healthcare is another that has consistently lifted dividends for years.

Of course, interest rates are a major factor to consider when buying a share for a dividend yield. A 6% return is valued when interest rates are low, but loses value as the cycle turns higher. The OCR is currently 2.50%.

Investing in yield is a popular strategy for investors, particularly for retirees that are less interested in long-term capital growth. Investing in yield tends to focus on mature companies, producing a return today, rather than the company retaining profits and focusing long term.

2025 has been a good year for yield investors, and with interest rates still in the doldrums, momentum remains behind the strategy.

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When it comes to dividends, one of the more frequently asked questions is in relation to dividend reinvestment plans.

A dividend reinvestment plan is when a company offers its shareholders the choice of receiving their dividend in the form of additional shares, rather than cash.

The benefits for the company are obvious. The company can reward shareholders without having to spend cash, which can help with debt levels.

Meanwhile, the benefit to shareholders is usually in the form of a discount. Most companies offer a modest discount, perhaps 2% to 3%, to provide an incentive to shareholders to accept the offer. Dividend reinvestment plans also do not incur fees, making them an effective vehicle for anyone wanting to “top up”.

My preference has long been to elect for a cash payment. Cash is more flexible, giving shareholders greater choice in terms of what to invest their funds into, and greater control of the timing of such an investment.

There are exceptions of course. If an investor was considering acquiring more shares in the company at the current levels, a dividend reinvestment plan is an ideal vehicle for this.

Not every company pays dividends and not every company that does pay dividends offers a dividend reinvestment plan. However, when faced with an offer to participate in a “DRP”, shareholders should carefully consider their options.

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The Fast Track Approval submission for one of New Zealand’s most anticipated projects has been approved, and works will now commence on a golden opportunity for one of our largest listed companies.

This refers, of course, to Kiwi Property Group’s Drury development, which received approval late Friday afternoon.

The Drury development is a strategic extension of the Sylvia Park development, which focused on the “mixed-use” strategy combining living, working and recreation in one area.

The Drury development is an ambitious project. Kiwi Property is designing an entire city centre, with thousands of new homes planned.

The project is being completed in three stages.

The first stage is currently underway. Earthworks and civil works are progressing and are estimated to conclude within the next two years. This will include all the services (water, internet, power, etc) for the residents and workers. This “stage” is expected to conclude in 2027, delays notwithstanding.

The second stage includes the construction of houses and important retail elements, such as supermarkets.

The final stage will begin next decade, anticipated in 2032, and will include the town centre, with offices, apartments and specialty retail stores.

Once completed, the Drury area is expected to house 60,000 residents, with public transport links, parks and cycleways.

The idea of purpose-built, mixed-use living towns – life, work and leisure within a 15-minute walk – may not appeal to all. However, the early success of Sylvia Park’s strategy has highlighted an opportunity within the market.

The Fast Track application was necessary as it included a variation to a previous consent and consent to proceed with the second stage of development once civil works conclude.

For Kiwi Property shareholders, the Drury development is an exciting one for the long-term prospects of the company. It may take many years for this investment to pay off but gives shareholders a clear path as to the future direction of the company.

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New Issue

Westpac New Zealand Limited (WNZL) has launched an offer of 5 year fixed rate unsecured, unsubordinated Medium Term Notes with the issue of up to $100,000,000 Notes with unlimited oversubscriptions.

The indicative margin range plus the underlying swap rate suggests an interest rate will be in the vicinity of 3.80%p.a..

Brokerage will be charged for the issue.

The notes will be rated AA- by S&P and will not be listed on an exchange.

The offer opened today and closes at 11am, Wednesday, 12 November.

If you are interested in the new issue please contact us.

Travel

12 November – Levin – David Colman

13 November – Whanganui – David Colman

14 November – New Plymouth – David Colman

Chris Lee & Partners Ltd

Market News – 3 November 2025

Johnny Lee writes:

The Restaurant Brands saga is nearly over, with the takeover offer from Finaccess approaching the 90 percent threshold. The most recent declaration from Finaccess confirmed 89.3 percent ownership.

To recap, Restaurant Brands is a long-standing NZX company that owns the rights to several well-known takeaway franchises, including KFC, Pizza Hut, Carl’s Junior, and Taco Bell.

The company first listed in 1997, issuing 85 million shares at $2.20 each. The final takeover price of $5.05 marks the end of its 28-year run on the exchange. During that time, shareholders received substantial dividends, including the occasional “in-kind” payment – Restaurant Brands was once known for including food vouchers with its dividends.

The company’s trajectory changed in 2019, when Mexico-based Finaccess launched a partial takeover for 75 percent of the shares at $9.45. Partial takeovers are rare, and Finaccess justified it by saying that “by remaining a public company, Restaurant Brands will have access to capital to fund future growth.”

Soon after, Finaccess appointed Jose Pares, Emilio Botella, Luis Alvarez and Carlos Gonzalez to the board, with Pares becoming chair. Three of the four were Finaccess representatives, while Botella was linked to a Finaccess subsidiary.

Aside from the COVID-19 dip in 2020, Restaurant Brands’ share price remained strong for several years. But the high-inflation period that followed COVID squeezed margins and slowed growth, sending the share price tumbling from $15 to $4. Finaccess then returned with an offer to buy the remainder of the company.

Clearly, Finaccess sees value in waiting for a recovery. The independent directors, however, argued that the $5.05 offer undervalued the company. An Independent Adviser’s Report placed fair value at $5.72 per share but, despite this, directors still recommended shareholders accept $5.05. Their reasoning was that minority shareholders would face significant liquidity risks if the company remained listed with Finaccess below 90 percent ownership. Few buyers would remain, leaving investors effectively stranded.

This contrasts with the Millennium & Copthorne Hotels takeover attempt earlier this year. CDL Hotels, the largest shareholder, reached 83.7 percent ownership – short of the 90 percent threshold – but chose to waive the minimum and keep the company listed. Millennium & Copthorne still trades today in small volumes around the offer price of $2.80. CDL has said it will not make another offer until next year.

These examples highlight the risks of investing in companies dominated by a single shareholder. When one group controls the company’s future, smaller shareholders must ensure their goals and risk tolerance align with those of the major owner – and accept that outside takeover bids are unlikely to succeed unless the controlling shareholder also wants to sell.

If Finaccess reaches 90 percent, Restaurant Brands will delist, ending its long history on the NZX. While the $5.05 offer may not represent full value, independent directors agreed it was the most practical outcome for shareholders.

New Zealand has several other companies with major shareholders. Briscoes, majority-owned by Rod Duke, has been a rare example of success, with reliable dividends and a resilient share price. Synlait’s shareholders handed control to Bright Dairy and a2 Milk in 2024 in exchange for new capital – and its minority holders have seen partial recovery since. AFT Pharmaceuticals, Delegat Group, and Winton Land are also majority-controlled, while many electricity generators remain government-owned.

Major ownership is neither inherently good nor bad. It simply means retail shareholders must recognise that decisions will reflect the controlling owner’s priorities – not necessarily their own.

If completed, the Restaurant Brands delisting will add to an already long list of departures from the NZX. In the past two years, Arvida, Marlborough Wine Estates, Good Spirits Hospitality, Cannasouth, New Zealand Oil & Gas, GEO, Just Life, MHM Automation, Geneva Finance, New Zealand Windfarms, Marsden Maritime Holdings, Manawa Energy, Vital Limited, Smartpay and Greenfern have all left the exchange.

Some takeovers remain active. Both Bremworth (formerly Cavalier) and Comvita are currently fielding approaches.

On a brighter note, Uvre and Manuka Resources have listed, while Santana Minerals completed its dual-listing last year.

The ongoing loss of listed companies has drawn plenty of debate – with fingers pointed at the NZX, FMA, KiwiSaver managers, and financial advisers. Others blame listing costs, disclosure rules, and competition from private equity or the ASX. For smaller firms, delisting often makes sense – reducing compliance costs – while other funding paths like crowdfunding and venture capital remain available.

Past efforts such as the NXT and NZAX boards – designed for smaller issuers – failed to attract enough listings and were merged into the main board. Most recent departures have been small or mid-cap firms, with overseas buyers often willing to pay more than local investors. Perhaps 2026 will bring a reversal of this trend and some new opportunities for New Zealand investors.

Santana Minerals published its quarterly report on Friday, covering July–September. It confirmed that in October the company began submitting its Fast Track Approval application to the EPA, including the $390,000 application fee. Chris will discuss next steps in Thursday’s Taking Stock.

Travel

12 November – Levin – David Colman13 November – Whanganui – David Colman14 November – New Plymouth – David Colman20 November – Havelock North – Edward Lee

Chris Lee & Partners Ltd

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