Online attack stops the NZ stock exchange, media company NZME shares soar at prospect of dividends and a retailer buckles under lockdown
NZX suffers serious cyberattack halting trade
The New Zealand stock exchange suffered a major service outage yesterday an hour before the close of trade.
Internet provider Spark said in a statement the NZX had experienced a “volumetric DDoS (distributed denial of service) attack” from offshore which disrupted its service connectivity, resulting in brokers being unable to access NZX’s systems or data via the internet.
As a result, trading was halted in its cash markets just before 4pm.
A DDoS attack aims to disrupt service by saturating a network with significant volumes of internet traffic.
The issue was eventually resolved late in the day, with connectivity eventually restored.
The disruption prevented what had been shaping up as a milestone day for the NZX50 to close above the psychologically significant 12,000, very close to where it had been trading in late February before the market meltdown began.
As it was, the NZX50 ended the shortened trading session up 0.6 percent at 11,993, just 80 points short of eclipsing its pre-Covid high for the year.
NZME reports a 13 percent fall in revenue, shares end sharply higher
In what it described as a particularly “tough year” in more ways than one, New Zealand Media & Entertainment Group (NZME) announced a 5 percent lift in operating ebitda to $28.9 million for the year to the end of June along with a $19.5 million reduction in its net debt.
With advertising and retail circulation revenues coming under significant pressure in the second half of the year as a result of the lockdown, the company reported a 13 percent fall in operating revenue to $157.8 million. It also received $8.6 million in wage subsidies.
The company cut more than 200 positions from its work force in April and introduced a 15 percent salary reduction on staff as a cost saving measure. In addition it axed its popular Radio Sport network due to the cancellation of the majority of live sport.
On a more positive note, NZ Herald paid digital subscriptions continued to grow totalling 43,000, while the company said its OneRoof real estate offering is now the leading digital platform in the residential property sector.
Despite the challenges Covid created for NZME, it was its ill-fated attempt to acquire rival Stuff earlier in the year that marked a low point for the company. With costs of almost $190,000 associated with the botched acquisition and the resignation of the company’s chair, Peter Cullinane, just minutes before its AGM in June was about to begin, shareholders will be hoping FY21 is more about NZME reporting the news than making it.
NZME shares closed sharply higher, finishing up 44.8 percent at 42 cents after the company raised the prospect of a return to paying a dividend next year. Investors certainly liked the sound of that.
Napier Port says forecasting difficult in uncertain environment
Announcing its financial results for the nine months to the end of June, Napier Port is forecasting an adjusted full-year net profit of $20 million but said the trading environment is too uncertain to determine the size of its final dividend.
Revenue for the third quarter fell 16.2 percent to $24.3 million compared to the same quarter last year due to a 17 percent decline in container volumes, while bulk cargo volume fell by 24 percent resulting from the cessation of log harvesting during the Level 4 lockdown.
On a pro-forma basis, excluding the wage subsidy and a $1.5 million tax gain from new rules on depreciation on buildings, net profit fell 14 percent to $15.5m.
Chief Executive Todd Dawson said the loss of the coming cruise ship season, which traditionally commences in October and extends through summer, with the difficulty assessing how the pandemic will affect demand for key trades from export markets and imports to the region, made forecasting particularly challenging.
Dawson said the board’s intention is to pay a final dividend for the year, subject to the outlook at the time. Any dividend paid will exclude income received through the wage subsidy, he said.
Napier Port shares closed up 1.7 percent at $3.54
Discount health and beauty retailer Price Wise in receivership.
The discount chain Price Wise, which operates 15 stores in the North Island and three in the South Island, is the latest retailer to buckle under the impact of the Covid-19 slowdown.
The retailer, which is continuing to trade, sells a limited range of mid-range cosmetics and home cleaning products.
Receivers Khov Jones have taken control of the business under a general security agreement held by shareholder Polar Capital, which is understood to be owed a seven-figure sum.
Zenith Distribution, the importer and wholesaler for the retail outlets, was also placed in receivership. Price Wise and Zenith are 30 percent owned by Big Chill founder Colin Neal’s Polar Capital which recently purchased the struggling retailer Smiths City.
Khov said the two companies turn over about $12 million annually. Expressions of interest for the sale of the business are now being sought.
UK supermarket job announces massive hiring spree
After months of headlines detailing layoffs and redundancies, UK supermarket giant Tesco has announced it is creating 16,000 jobs to meet surging demand in its online business, delivering a rare boost to the struggling UK economy.
Britain’s largest supermarket chain said the new permanent roles are in addition to 4,000 jobs it has already added since the start of the coronavirus crisis.
Workers who joined on a temporary basis at the start of the pandemic will be offered the positions first. The jobs include pickers to assemble customer orders, delivery drivers and other roles in stores and distribution centres, Tesco added.
The retailer says online customer numbers have more than doubled in recent months to nearly 1.5 million, up from around 600,000 at the start of the pandemic. The company said the new roles will help it to meet spiralling online demand for grocery orders.
Online grocery sales have soared in the UK since coronavirus lockdowns were introduced in March, with retailers anticipating some shoppers who have made the shift will permanently ditch their old habits. The opportunity was highlighted last month when Amazon said it would offer free grocery deliveries to Prime members in London and the surrounding areas.
Tesco said that before the pandemic around 9 percent of its sales were online, a figure that has grown to more than 16 percent. The company expects the value of online sales to grow by two-thirds compared to 2019, reaching over £5.5 billion this year.
Dow Jones Industrials index gets a makeover
The world’s most well-known stock index is about to get a makeover. The Dow Jones Industrial Average is getting a shakeup to balance out the disruption from Apple’s forthcoming stock split.
Salesforce, Amgen and Honeywell International will join the Dow, replacing Exxon Mobil, Pfizer, and Raytheon, S&P Dow Jones Indices said yesterday.
The changes to the 30-stock benchmark index are designed to offset Apple’s 4-to-1 stock split, which will take place next week. The split would have reduced the index’s weighting of the tech sector. Adding Salesforce will help keep the appropriate balance.
The new additions will also “help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy,” according to S&P.
The changes to the index will take effect from trading on August 31. They won’t change the level of the Dow because the S&P is changing the “Dow divisor” that is used to calculate the level of the index based on the performance of the component stocks.
The Dow is designed to measure the strength or weakness of the entire US stock market, and Monday’s changes hint at some broader shifts in the American economy. Being part of the Dow has been a long-standing symbol of American business prestige. However, most index and exchange traded funds trade the much broader S&P 500, among other indexes, rather than the 30 Dow stocks.
It’s still KFC – without the finger lick
It has become one of the world’s most enduring marketing slogans but in these times of Covid, “finger lickin good” doesn’t quite seem to be the right line to push during a global pandemic.
As a result, US fast food giant Kentucky Fried Chicken has decided to pause using its “finger lickin’ good” slogan…at least for now.
Several months after health officials recommended everyone stop touching their faces to help stop the spread of coronavirus, KFC said the 64-year-old slogan “doesn’t feel quite right” in these Covid times.
“We find ourselves in a unique situation — having an iconic slogan that doesn’t quite fit in the current environment,” said Catherine Tan-Gillespie, global chief marketing officer at KFC. But fear not, the menu isn’t changing, and the company said the slogan will return when the “time is right.”
KFC blurred out the slogan featured on old billboards and signs in a cheeky ad released on its YouTube page. But you’d probably be right to be cynical that the announcement is also a clever marketing ploy dressed up as news.