26 May 2019

Today's business news: What you need to know

6:38 am on 26 May 2019

Latest - Property investor Argosy has made a strong profit on valuations gains.

The company's net profit rose 36 percent to $133.7 million, including a revaluation gain of $70.5m.

Argosy's property income rose 1.5 percent slightly to $102.5 million for the period, which includes rental loss recoveries from insurance on earthquake damaged buildings.

Freightways increasing express package deliveries

Courier delivering package.

Photo: 123rf

The transport company says the increase could help to boost it finances.

In a presentation released to the market today, the company says its new pricing model has been accepted positively by its customers.

However, it warns that its DX business will have to lower prices for delivering bulk mail, after its competitor New Zealand Post cut prices.

Freightways also expects softer growth in its business to business division.

Tech sector investment continues to grow

A surge of investment in New Zealand technology companies is set to boost their export revenue to record levels this year.

The Technology Investment Network (TIN) says the tech sector is growing faster than ever before, with thanks to extra funding from American investors.

Last year investment in early stage tech companies rose 31 percent to $99 million, while revenue earned overseas from the sector hit nearly $8 billion.

The TIN report, which reveals how New Zealand's technology sector is doing, will be released in October.

Spark broadband price rise a fair trading breach - ComCom

The Commerce Commission says Spark appears to have breached the Fair Trading Act when it notified customers of a broadband price rise last year.

The commission investigated statements made by the telco on its website and in emails last August and September which told customers the price of its copper broadband plans was going up by $5 a month.

Spark's terms and conditions required that it not change the monthly charge without either gaining the customers' consent or giving them the option to cancel their contract without early termination fees, the commission said.

That was not explained to customers when they were notified of the price rise.

Fonterra still struggling as payout forecast narrows

Fonterra remains under market and financial pressure as it narrowed its payout forecast for the season just ending and signalled further asset sales.

It said it expected to pay between $6.30 and $6.40 a kilo of milk solids for the current season, lowered the forecast dividend payout from its high value consumer operations by 10 cents to between 10-to-15 cents, and set a wide forecast range for next season's payout of $6.25 to $7.25 a kilo.

In an update for the nine months to April, it said group revenue and sales were than last year, but its margins were under pressure and its operating earnings were down 9 percent to $522m.

Read here for more on this story.

RBNZ plans to ease loan restrictions - at some stage

The Reserve Bank is willing to ease the loan-to-value restrictions (LVR) on bank property lending as long as it does not compromise the integrity of the financial system.

A review of the LVRs said they had been successful in cooling house prices and growth in household debt, as well as reducing the risk in the banking system from risky lending.

Retail banks are required to have no more than 20 percent of mortgage lending to owner-occupiers with less than a 20 percent deposit, and no more than 5 percent of their lending to investors with less than a 30 percent deposit.

Read here for more on this story.

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