The Deloitte South Island Index of listed companies has reported a flat past 12 months, undermined by plunging share price performances of leisure retailer Kathmandu, Dunedin cancer diagnostic company Pacific Edge and Synlait Milk.
Following record gains in recent years, the Deloitte South Island index achieved a ''modest'' 0.8% growth, or $96.4 million, in the market capitalisation of 31 companies for the year to March, Deloitte corporate finance partner Scott McClay said.
The 0.8% annual growth comes after a 0.2% drop during the most recent quarter, the index's third quarterly decline during the past four quarters, he said.
''Only 12 of the 31 companies in the index grew during the 12 months,'' he said.
Mr McClay said the outlook for the index during the next year was ''mixed'', with global economic factors expected to influence the New Zealand dollar and the performance of many South Island companies.
The index tracks listed companies with South Island operations and their quarterly performances, measured by changes to the value of their market capitalisation.
Mr McClay said during the past three years, the performance of the largest companies had been ''nothing short of breathtaking'', the index having peaked in the December quarter of 2014.
While the smaller companies on the index had shown ''promising pockets of positive performance'' in recent years, they had suffered from lower publicity and investor interest, he said.
The index's 0.8% annual growth to March was outperformed by all comparator indices, with the NZX 50 Capital Index increasing by 8.6%, the ASX All Ords up 8.5% and the Dow Jones up 8% during the year to March 31.
Mr McClay said the three largest companies in the index, Ryman Healthcare, Meridian Energy and EBOS Group, provided the index with significant weight.
''Over the last year these three companies, each with market capitalisation in excess of a billion dollars, collectively grew the index by 9.8%.
''However, individually the results were mixed,'' Mr McClay said.
Meridian Energy was the standout performer, gaining $1.08 billion, up 74.6%, EBOS Group gained a more modest $89.2 million, or 5.9% and Ryman decreased in market capitalisation by $455 million, a 10.4% decline, after a long run of significant share price growth in which it almost tripled in market capitalisation during the two preceding years, he said.
However, Mr McClay noted some data was ''skewed'' by Meridian Energy, as without its ''exceptional performance'' the energy and mining sector would have dropped 63.2% and suffered the index's greatest loss, but instead booked a 62.8% gain.
The company with the largest annual fall in market capitalisation was Kathmandu, dropping $493.8 million, or by 64.0%, on the back of poor sales in the lead-up to Christmas and disappointing results from Boxing Day through January.
Dunedin's Pacific Edge also performed poorly on the stock exchange for the year, dropping $184.8 million in market capitalisation, a decline of 43.0%, while Synlait Milk also struggled with its share price, dropping in market capitalisation by $111.3 million, or 20.6%.
Mr McClay said excluding the three largest companies from the index, 10 achieved gains, 17 saw declines and one company had no change.
Of the 10 gainers, Mr McClay said Heartland Bank was ''the shining light'' with an annual lift in market capitalisation of $232.1 million, or 63.5%, after 12 consecutive quarterly gains.
The keys to Heartland's standout performance was the elevation of their Standard & Poor's credit rating from BBB- to BBB, a positive full-year profit result and investment in HarMoney Corp, New Zealand's only licensed peer-to-peer lending platform, he said.
Only three of the seven sectors in the Deloitte South Island Index achieved growth in their market capitalisations during the year, with the energy and mining sector leading the way with its increase of 62.8%, plus topping the table in terms of dollar growth, Mr McClay said.
