Insert from Craig's latest report. Will be interesting to see tomorrow.
Craig's say good buying.
FBU overweight maintained; value on both DCF and relative basis
In this report, we preview the upcoming FBU result (Wed 17 Aug) and revisit our expectations of the NZ resi construction cycle through to 2030, with a particular focus on FBU's medium-term earnings forecast. FBU reaffirmed its guidance as part of its Investor day in Jun-22, with an FY22 EBIT target of c.$750m, FY23 EBIT target of $850m+ (assuming flat market activity in FY23 vs. 2H22), and a through-the-cycle EBIT margin target of c.9-10% (2H22 margin of c.9.5%). With its FY22 EBIT largely printed (CIPe $749m), we turn to FBU's outlook for FY23/24 and plans for its c.$500m growth capex over the next three years. Our modelling suggests the market continues to undervalue the stock both on a DCF ($5.89, +9.5% upside to last close) and relative basis (trading on CIPe 10x FY24 PE, long-run average 13x), and we see upside potential to the share price on result day providing guidance remains firm and data/messaging supports its through-the-cycle earnings in a macro environment that continues to deteriorate. Maintain Overweight.
FBU looks cheap on relative PE valuation
Source: Bloomberg, CIPe
FBU has historically traded at an 9% discount to its Australian peer multiples, but based on our EPS forecasts, FBU currently trades on an one-year forward PE of 8.4x, a 27% discount to its Australian peers which trade at 11.5x. Using the historical discount to its Australian peers of 9% would see FBU trade on an one-year forward PE of 10.5x. Based on our forecast forward EPS of 64.3cps, applying a 10.5x PE generates a TP of $6.75/share.
Thanks for sharing Craigs view.
FBU has never resonated with me as an opportunity.
Whether its their history of mismanagement of major projects, the bloated management structure and eye watering salaries right down the management structure, the extraordinary level of directors fees or the lack of growth over the years I am not sure but most likely a combination of all of the above.
Zooming out and having a look at the long term is always a good idea because it encapsulates the full breath and depth of the company culture and its relative performance against its peers.
If we go back to 1997, 25 years ago FBU was $4.88 on 30 Sept 1997 and James Hardie was $4.25.
Today FBU in inflation adjusted terms is worth considerably less at $5.46, (the RBNZ inflation calculator is currently offline but surely any reasonable person can see $5.46 now in real terms is a LOT less than $4.88 was 25 years ago) and yet James Hardie is now $36 (8.5 times the price)
In my view comparing some of the Australian building companies that have been well managed and grown substantially over time with FBU that has destroyed shareholders capital is completely inappropriate.
Even if we ignore some of the fiasco's in recent years and take an average of last years earnings, this years expected earnings and the average of analysts expectations for the next two years I get an average earnings of 52 cps. My argument is this is a pure cyclical and has shown no growth in the last 25 years. I think the share price performance over that timeframe gives very solid support to my thesis.
If we take the classic time honored Ben Graham no growth PE of 8.5 and apply to the average recent and average analyst forecasted earnings, (keep in mind this average takes out the fiasco's of some recent years so shows FBU in a much more favorable light than an arithmetic average of the last 10 years across the cycle earnings), so taking a sympathetic view to FBU and suggesting most of its problems are behind it apart from the previously alluded too bloated management structure I get a no growth PE of 8.5 times x 52 cps = $4.42
Paying anything more than that is in my opinion paying more for peak cycle earnings and / or paying more for growth that hasn't been proven to be plausible over the long run. My contention is simply this. FBU is a very good company for the directors, management and other senior employees and provides very poor returns for shareholders, (after the previously mentioned stakeholders have gorged themselves at the table every year).
I have no regrets about never being a FBU shareholder. Over the long run its a value destruction company.
Agree FBU has a history of wealth destruction and has been a poor performer for so long. Can a leopard change its spots. There seems to be a lot of analysts that say it's way undervalued. I guess will see Tom. Will be interesting with STU result coming up.
Quote from: Shareguy on Aug 16, 2022, 06:52 PMAgree FBU has a history of wealth destruction and has been a poor performer for so long. Can a leopard change its spots. There seems to be a lot of analysts that say it's way undervalued. I guess will see Tom. Will be interesting with STU result coming up.
FBU a good payer a fees. Over the years has raised lots of debt, acquisitions and divestments, corporate reviews, the occasional equity raising. I'm sure none of the analysts covering it let that affect their opinions....
I had a bit of fun dabling around with it ~2005-2007 - never looked back since.
Holders happy. Nice Divvy too.
https://www.nzx.com/announcements/397072
Summary:
- Revenue $8,498 million, up 5% from $8,120 million in FY21
- Net Profit After Tax $432 million, up 42% from $305 million in FY21
- EBIT before significant items $756 million, up 13% from $668 million in FY21
- Return on Funds Employed before significant items 19.3%, compared to 18.8% in FY21
- Cash flows from operations of $592 million, compared to $879 million in FY21
- Fully imputed final dividend 22 cents per share, bringing full-year FY22 dividend to 40 cps
- Completed $274 million total share buyback programme
Fletcher Building chief executive Ross Taylor said: "Fletcher Building delivered strong results in FY22 across all key metrics. Our performance highlighted our ability to deal with a dynamic operating environment, while remaining focused on delivering long-term, sustainable growth.
"Group revenue for the year was $8,498 million compared to $8,120 million in FY21, while EBIT before significant items was $756 million, compared to $668 million in FY21. Group EBIT margin lifted materially in FY22 to 8.9% and we were pleased to deliver a second half margin of 9.5%. Our return on funds employed (ROFE) remained ahead of target at 19.3%.
"Fletcher Building's businesses generated cash flows from operating activities of $592 million. Our balance sheet remains robust with $1.1 billion liquidity and net debt of $670 million at year end. This positions us well as we move into the new financial year and continue to invest in the growth of the business.
"Having delivered a strong earnings and cash flow result, the Board has approved a fully imputed final dividend for the year ended 30 June 2022 of 22.0 cents per share to be paid on 6 October 2022. Combined with the 18.0 cents per share interim dividend, this brings the total dividend to 40.0 cents per share for the FY22 year. In addition, Fletcher Building completed its on-market share buyback programme of $274 million in aggregate.
Divi 22c Very very nice.
FBU share price 6 bucks this week ..... heading to 7 bucks by end of year
The F23 guidance of $100m profit uplift is huge
Normalised EPS of 60 cents .... Craigs say historical PE of 13 ..... that's $7.80 ....plus uplift share price be over 8 bucks by Xmas 23
Peak of the cycle earnings in FY23 is how I see it.
Had a brief look this morning. Results were below both Fbar and Craig's on npat. Met guidance on Craig's $53 cps eps. Higher for both on the divi. Forbar had forecasted $35 cps and Craig's $38 cps. Actual was $40 cps.
What was the highlight for me was forecasting $100m increase in ebit fy23.
Looking good for STU result.
Quote from: Shareguy on Aug 17, 2022, 10:40 AMHad a brief look this morning. Results were below both Fbar and Craig's on npat. Met guidance on Craig's $53 cps eps. Higher for both on the divi. Forbar had forecasted $35 cps and Craig's $38 cps. Actual was $40 cps.
What was the highlight for me was forecasting $100m increase in ebit fy23.
Looking good for STU result.
EPS was 60 cents if you don't count the abnormals (like something to do with transation on reserves)
Saying steel business up 40 percent on last year. Looking very good for a stunner from STU.
Quote from: winner (n) on Aug 17, 2022, 10:50 AMEPS was 60 cents if you don't count the abnormals (like something to do with transation on reserves)
Trouble is abnormals are normal for FBU 😜
Good luck with your $9 ramp. I'm sticking with my view expressed yesterday.
Quote from: Basil on Aug 17, 2022, 12:00 PMTrouble is abnormals are normal for FBU 😜
Good luck with your $9 ramp. I'm sticking with my view expressed yesterday.
still be 7% divie yield at 9 bucks
That's pretty good .... especially when every man and his dog are saying interest rates are heading down
Quote from: winner (n) on Aug 17, 2022, 12:36 PMstill be 7% divie yield at 9 bucks
That's pretty good .... especially when every man and his dog are saying interest rates are heading down
AIR divvy was a bit more than that at the peak of its cycle. What can possibly go wrong with cyclical companies 😜
Quote from: Basil on Aug 17, 2022, 12:47 PMAIR divvy was a bit more than that at the peak of its cycle. What can possibly go wrong with cyclical companies 😜
Ross will see everybody right - he's eliminated the cyclical nature of their earnings
Must work hard to improve his rem .... $6.6m last year ....more tha $7m next year
Deserves every penny of it I suppose --- looking after shareholders as he does
But one comment in a NBR story is probably how many think about this 'obscene' $6.6m package -
Yep, because it was all about him. No one else could have possibly done this, he did it all alone and the market had nothing to do with it. How absurd.
Fletchers put a TSR (movement in share price + dividends) in the Trend Statement in the Annual Report
This is the last 5 years TSR by year
2018 -6%
2019 -29%
2020 -21%
2021 107%
2022 -28%
Over last 5 years that a TSR of -21%
Never mind we are heading to another 100% plus year
Things always return to a state of equilibrium - like a 100% gain in 2023 would mean a 10% pa TSR over last 5 years
No wonder there is a love affair with FBU at the moment - this it is different
Raining again and I'm bored so into the database and pulled out Fletchers EPS for this century
Quite intriguing really .... and does reinforce the notion of 'yes, this time its different, really is'
So many acquisitions, divestments, restructures, transformations, strategic initiatives and all those things and profits aren't really that much different from years and decades ago - hence the this time is different comment
Interesting they did great in the boom up to 2008 but heck not too good afterwards
Basil - only cyclical last few years eh
Maybe on this my 9 or 10 bucks is a pipe dream
00000fbu.JPG
The self congratulatory financial largesse runs very deep and wide in FBU and is strongly endorsed and encouraged by the board themselves. Its a culture of Greed and one the NZSA took exception too but were basically given the middle finger recently when they tried to engage.
Ironically enough I couldn't help notice that the employee engagement score in the presentation is less than average despite the egregiously generous salaries right down through the management structure.
Good chart mate, picture says a thousand words. Just a cyclical at or very close to the peak of the cycle. 8.5 x eps of 52 cps = $4.42 is being too kind to them.
They'll mess another big project up or have some other big abnormal in the normal course of business soon enough.
Fbar out with outperform at $6.70
Thay say
"While signs of an improving housing market may be required for a more meaningful rerate in FBU's share price, investors are paid to wait with a 7.4% fully imputed yield."
Quote from: Shareguy on Aug 18, 2022, 07:06 AMFbar out with outperform at $6.70
Thay say
"While signs of an improving housing market may be required for a more meaningful rerate in FBU's share price, investors are paid to wait with a 7.4% fully imputed yield."
When assessing whether a dividend is sustainable or not I am mindful of a companies track record across the business cycle.
F23 EBIT 855m or better guidance confirmed
And a refreshed sustainability strategy which includes a new commitment to achieve a target of net zero carbon emissions by 2050 will give them a few extra brownie points with fund managers ...and maybe recognised in future share price
http://nzx-prod-s7fsd7f98s.s3-websit...121/381837.pdf
Interesting article in the NBR today about potential problems with the new walkworth motorway.
Insert
there was the matter of a second claim for excess costs after consortium partners Fletcher and Acciona reached an $85 million settlement with Waka Kotahi in 2020 for the costs of the first Covid lockdown.
Taylor said the new claim was "very sizeable."
According to Fletcher's annual report, the partners are in talks on variations to the contract sum and an extension to the completion date.
"If no variations or extension of time are agreed between the parties, the Construction JV will incur unrecoverable costs and liquidated damages will apply beyond 18 July 2022, being the current contractual service commencement date."
A broker said to me this week. "Have a look at Fbu."We see it as a great opportunity. I notice the main brokers have as outperform
Forbar say
FBU continues to trade on undemanding valuation metrics with a 12 month forward P/E of 8.2x, almost two standard deviations below its long run average, and a significant discount to its Australian peers. While signs of an improving housing market may be required for a more meaningful rerate in FBU's share price, investors are paid to wait with a 8.1% fully imputed yield.
I got thinking " Can a leopard change its spots"
Maybe this new CEO is a good one. Thoughts ?
FBU has in my books a (three year) forward PE of 8.6 and a (three year) forward earnings CAGR of 11.4, which does looks juicy. Hey, that's a PEG (Zulu) of 0.75 ... amazing for such a dinosaur!
For comparison - Heidelberg Cement (same industry and operating world wide) have currently a forward PE of 6.1 and a earnings forward CAGR of 15! PEG is 0.4 - a dream! Still so much more juicy, isn't it?
I don't know - many industries (and building industry is one of them) are currently cheap like chips. I suppose markets prices in an apocalyptical crash. If markets are wrong, one can currently buy really cheap shares.
I suppose it is just a matter of waiting for FOMO becoming stronger than the fear of an apocalyptic crash ... but don't ask me, when this will happen.
Discl: hold both FBU as well as Heidelberg Cement (HEI.DE).
I have been watching this but note the historical share price growth has not been very stellar. BP, is this strictly a yield play for you? Do you think this time is different and there will be capital gains to be had as well? I believe a couple of brokers forecast earnings to peak in 2023/2024 and decline somewhat thereafter.
Forbar said - and a significant discount to its Australian peers.
This has always been the case ... and probably will stay that way
When BP said FBU has a (three year) forward earnings CAGR of 11.4 I thought I'd update the chart I posted a while ago.... making it look better
I've used the EPS numbers for F23/F24 and F25 and they are declining
Never mind - guru analysts can be wrong - but I did a new chart anyway
Doesn't really look that impressive really . maybe it deserves that Current PE of about 9
0000fbu.JPG
Summing up a few things from this morning -
Next 3 years profit look OK ..... forbar (and maybe BP in a round about way) imply a PE of about 13 so share price should be over 8 bucks
BUY BUY .... maybe a STRONG BUY
I bought a few a couple weeks back on the dip. The CEO seems to have things in hand and their outlook seems pretty positive for a sharemarket that isn't that positive!
Craig's have just released an updated note as follows
Cantilevered consents
FY23 earnings firm, but activity decline to commence 1H 2023
In this note we (1) review the most recent consent data for new home builds, (2) refresh our view on the housing market decline given a reasonably fluid demand supply balance, including NZ's current interest rate outlook and RBNZ's Nov-22 'Financial Stability Report', and (3) fold these indicators into our outlook for FBU. Our updated forecasts include a small lift in FY23 EBIT, in line with FBU's ASM messaging, and a cut to FY24/25 EBIT by 5% due to an expected house price decline of 25%, peak to trough (prev. 20%). Our EBIT estimates in FY24/25 are now 10% and 17% below consensus, with our revised Target Price coming out at $5.83 (prev. $6.55). Overweight maintained
Quote from: Shareguy on Nov 03, 2022, 03:36 PMCraig's have just released an updated note as follows
Cantilevered consents
FY23 earnings firm, but activity decline to commence 1H 2023
In this note we (1) review the most recent consent data for new home builds, (2) refresh our view on the housing market decline given a reasonably fluid demand supply balance, including NZ's current interest rate outlook and RBNZ's Nov-22 'Financial Stability Report', and (3) fold these indicators into our outlook for FBU. Our updated forecasts include a small lift in FY23 EBIT, in line with FBU's ASM messaging, and a cut to FY24/25 EBIT by 5% due to an expected house price decline of 25%, peak to trough (prev. 20%). Our EBIT estimates in FY24/25 are now 10% and 17% below consensus, with our revised Target Price coming out at $5.83 (prev. $6.55). Overweight maintained
So target reduced by 11% but still in favour
Target $5.83 implies current price should becabout $5.20
Not too far off ....all looking for FBU
I must admit that I am very tempted to get back in.
Quote from: Plata on Nov 03, 2022, 12:13 PMI have been watching this but note the historical share price growth has not been very stellar. BP, is this strictly a yield play for you? Do you think this time is different and there will be capital gains to be had as well? I believe a couple of brokers forecast earnings to peak in 2023/2024 and decline somewhat thereafter.
FBU is a cyclical company sitting in the lower two quadrants with amazing PE and earning CAGR. On top of that paying a reasonable dividend (8.6% dividend yield last time I checked) and I expect building activity to continue for some time to come. We still have not enough affordable homes, increasing immigration will take care of the the better homes - and our infrastructure is creaking in all corners.
I recon with a bit of patience holders will get the dividend plus some capital appreciation. Whether this will be in 2 years of 5 years, I don't know, but hey, we are investors, aren't we?
FBU used to be well above $10 per share ... well possible they return one day to these lofty heights.
Quote from: BlackPeter on Nov 03, 2022, 05:48 PMFBU is a cyclical company sitting in the lower two quadrants with amazing PE and earning CAGR. On top of that paying a reasonable dividend (8.6% dividend yield last time I checked) and I expect building activity to continue for some time to come. We still have not enough affordable homes, increasing immigration will take care of the the better homes - and our infrastructure is creaking in all corners.
I recon with a bit of patience holders will get the dividend plus some capital appreciation. Whether this will be in 2 years of 5 years, I don't know, but hey, we are investors, aren't we?
FBU used to be well above $10 per share ... well possible they return one day to these lofty heights.
What are these quadrants You talk about BP
Quote from: winner (n) on Nov 03, 2022, 06:27 PMWhat are these quadrants You talk about BP
Basic maths of cyclical movements.
Here is a picture (from the world of electronics - i.e. ignore the electrical terms around the sinewave). It shows nicely the four quadrants of the cycle ...
quadrants.JPG
Thanks BP - I think I sort of get it
Suppose you could say the industry FBU play in is cyclical.... boom and bust and all that. FBU sales etc are more of a random walk.
I'd think you'd agree that the industry is currently at or near the top of a cycle .... and guru analysts are forecasting the FBU random walk is going downhill for the next few years (not steep but a gentle slope)
FBU does have a low PE at the moment but cyclicals generally have low PEs (v their history) at the top of the cycle. FBU PE has averaged 13 this century (not counting the negative years) and ranged between 6 and 21
I sold my long held FBU shares last year in disgust of their poor performance. I stated then that "I won't be back"
After discussing with people in the Industry and hearing from current employees decided to have a detailed look.
I'm hearing that the culture under current CEO is far better than it's ever been. A good backlog of work with little concern about the doom and gloom that many are forecasting.
On all metrics it looks undervalued. Debt came in well under what most analysts had forecast. Yes it's a cyclical but at these prices I see value.
I'm back on the register at $5.05. Hopefully this time will be different.
Quote from: winner (n) on Nov 04, 2022, 10:17 AMThanks BP - I think I sort of get it
Suppose you could say the industry FBU play in is cyclical.... boom and bust and all that. FBU sales etc are more of a random walk.
I'd think you'd agree that the industry is currently at or near the top of a cycle .... and guru analysts are forecasting the FBU random walk is going downhill for the next few years (not steep but a gentle slope)
FBU does have a low PE at the moment but cyclicals generally have low PEs (v their history) at the top of the cycle. FBU PE has averaged 13 this century (not counting the negative years) and ranged between 6 and 21
Hard to say in which part of the cycle the building industry is.
I guess it depends how this and the following government react to the promised economic downturn. Many wise governments in the past managed to mitigate economic crisis by building infrastructure ... and, while our government debt is comparatively high compared with the past, it is very low compared to (nearly?) all other OECD countries.
We do need lots of infrastructure and I'd rather see us building it. This would be good for FBU (assuming they learned a lesson from the past how to handle big projects). I am an optimist :) ;
James Hardie ASX lowers F23 profit guidance ...share price slumps 13%
Outlook not too bright they say
Sentiment flowed over to FBU ..... back below 5 bucks.
A look at FBU's last acccounts:
Recast Accounts (https://recastinvestor.substack.com/p/update-fletcher-building-fbunzx-fbuasx)
Thanks for posting
Quote from: winner (n) on Nov 08, 2022, 06:06 PMJames Hardie ASX lowers F23 profit guidance ...share price slumps 13%
Outlook not too bright they say
Sentiment flowed over to FBU ..... back below 5 bucks.
Also Simonds group who are one of the largest house builders needs cash injection. Oh dear
Allan Gray buys another 8m.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/402193/383166.pdf
Construction pipelines still looking solid
RMC production is a leading indicator for the construction sector, and including cement and aggregates is a significant exposure to Fletcher Building (FBU). RMC volumes have also proven to be a useful guide to FBU's NZ revenue (ex. construction and residential development) growth in the past. Concrete is typically poured at the start of a build and as such can be an early indicator of lower demand for later stage products such as plasterboard and insulation. At its AGM in October, FBU reiterated guidance for NZ$855m EBIT and were confident that volumes would remain solid over the next six to nine months; RMC volumes are broadly supportive of this view. Of the steel distributors, Vulcan Steel (VSL) does not sell reinforcing steel and roofing, and as such is less exposed to construction activity and therefore changes in RMC volumes. The next news flow from FBU, VSL, and Steel and Tube (STU) will be their respective 1H23 results to be reported in February 2023.
I note annual production of Ready mixed concrete reached an all time high in Sept quarter (stats nz)
Fletchers must be keeping busy ...
Another $150m provision for convention centre....but guidance maintained
Based on this, we reconfirm our FY23 EBIT target (excluding Significant Items) of $855 million+. Our balance sheet continues to be in a strong position, with Group leverage expected to be at the lower end of the Group's 1x-2x target range through FY23."
https://www.nzx.com/announcements/404201
Just as well Significant Items don't count eh shareguy
Good they buying trees and building a wood panels plant
Design the plant right and zillions of govt grants available as well
Craig's latest say
FBU looks cheap on relative PE valuation
Source: Bloomberg, CIPe
FBU has historically traded at an 8% discount to its Australian peer multiples, but based on our EPS forecasts, FBU currently trades on an one-year forward PE of 8.2x, a 29% discount to its Australian peers which trade at 11.5x. Using the historical discount to its Australian peers of 8% would see FBU trade on an one-year forward PE of 10.6x. Based on our forecast forward EPS of 59.2cps, applying a 10.6x PE generates a TP of $6.28/share.
Thanks shareguy for that
FBU share price up to its old tricks ..... heading to a 2 year low
Mr P liked FBU because it was a TA gurus dream stock in the way it behaved. I followed the long trends on FBU this century (the up ones of course) ....been good fun and profitable.
Could be another go coming up as the 90ma vcould breakthrough the 200ma soon. Let's see what happens.
Alan Gray guru value investors ...Love NZ bargains
Picked up heaps more FBU ..... and SKC
Plenty of fixing up to do up north ....good for Fletchers I'd say
Quote from: winner (n) on Jan 30, 2023, 03:11 PMPlenty of fixing up to do up north ....good for Fletchers I'd say
True - good for FBU, but don't forget they need as well plenty of steel to reinforce the concrete they will be pouring. Good for STU as well .... WIN - WIN! ;)
Quote from: BlackPeter on Jan 30, 2023, 05:32 PMTrue - good for FBU, but don't forget they need as well plenty of steel to reinforce the concrete they will be pouring. Good for STU as well .... WIN - WIN! ;)
And Vulcan Steel
Steel is one of the great ironies of the day.
A dirty co2 emitter like steel is so much in demand as the world try's to
de carbonise and fight climate change.
I read somewhere there is over 300 tonne steel in a single new wind turbine( not sure if that's a big one or small one). Imagine how much steel needed to build concrete dams, nuclear power plants and solar farms for all the renewable energy the world needs.
And then everytime Mother Nature reminds us whose boss destroying bridges, rail, infrastructure ..it seems we need more steel to repair, rebuild and strengthen.
Maybe FBU should try and buy STU again before it gets too valuable.
Once they start getting the cost of production and co2 emissions down by making steel using green energy like hydrogen rather than fossil fuel...steel will be trendy.
STU should be in every climate change activists portfolio. 8)
Discl. Hold Stu not FBU
Quote from: BlackPeter on Jan 30, 2023, 05:32 PMTrue - good for FBU, but don't forget they need as well plenty of steel to reinforce the concrete they will be pouring. Good for STU as well .... WIN - WIN! ;)
STU is a focused play on steel while as steel is but one division of FBU. FBU's big headwind on earnings in 2023 and beyond is the residential property downturn which will severely impact on its new homes division.
So happy to hold STU.
Quote from: winner (n) on Jan 30, 2023, 03:11 PMPlenty of fixing up to do up north ....good for Fletchers I'd say
Yeah, that went great in Christchurch...oh wait.
Quote from: Hectorplains on Jan 30, 2023, 07:43 PMYeah, that went great in Christchurch...oh wait.
Good point. On the other hand ... in Christchurch FBU clearly did bite off more than they could chew. Question is, whether they have learned from this experience? Some insiders seem to think the company has changed ... I guess only time will tell.
Interesting few paragraphs in the latest quarterly fisher funds Barramundi newsletter that was thought provoking.
Part of the Newsletter was titled "Culture" Difficult to define, but a critical ingredient in any high performing business.
Gives me plenty of thinking to do about various companies.
Why post something on that in here you folks might ask?
Well, from recollection the N.Z. shareholders association have taken the directors to task about their pay rates, directors fees are to the best of my knowledge the highest of any NZX listed company and the directors lack of construction experience. Also, the CEO's salary is the highest of any listed company and many would argue a lot of the senior management are egregiously overpaid.
I would argue there is a culture of greed that flows right from the top down, and it permeates the entire company.
On the other hand, on the subject of culture, if you look at a company like Mainfreight, (no holding), there is clearly a culture of excellence in service to customers that's fueled their growth over the years.
Put simply, it's hard for shareholders to do well long term in a cyclical company, (the long-term performance of FBU is truly appalling) when all the pigs at the trough are eating all they can, as quickly as they can. That's my call on FBU and why I have never been a shareholder and never will be.
I recently significantly reduced my holding in HGH as I am not very happy with the culture there.
Basil is right. The performance over a long period has been absolutely terrible. However the CEO seems to be well respected and the culture seems to have improved dramatically according to current employees that I have talked too.
According to Forbar FY23 forecast is $487m NPAT, $0.63c EPS and divi $0.41. That's a 8.3 PE and a gross yield of 10.9 percent. Low debt at 1.0
Not only are they trading at a significant discount to their long run average, comparable companies CSR is currently on a PE of 12, James Hardie 15.
I got out of FBU some time ago and decided I would not go back due to the continued poor performance. Hopefully I wont be disappointed to get back in, as I see FBU as a turnaround storey like STU and now have a significant holding.
Good luck with that Shareguy...old saying springs readily to mind...to do with leopards and their spots ;)
Just for fun here's the share price 10 years ago on 31 January 2013 and now of the three companies you compared.
JHX, was $9.41, now $31.31
CSR, was $2.02, now $5.28
FBU, was $9.11, now $5.20
One of the above has a VERY different track record to the others.
No growth companies have a fair PE of 8.5 when the 10 year risk free rate is 4.0% (Ben Graham)
We're a bit above 4% now, so the PE looks about right to me and FBU probably only fair value in my opinion.
I think FBU is "at best" a traders stock.
December consents numbers out and they remain at elevated levels ...but not so good in the eyes of some commentators.
Fletchers should remain busy
Westpac said this -
That certainly doesn't mean that a crash in construction activity is imminent. Indeed, over the past year, the number of new consented projects has risen much faster than actual construction activity. As a result, there still is a substantial existing pipeline of planned work. The construction sector is continuing to grapple with stretched capacity and shortages of skilled staff. Those conditions are acting as a handbrake on the pace of building activity. We expect an easing in construction activity over the next few years as fewer new projects come to market. But that is likely to be a gradual easing from high levels.
The recent flooding in Auckland and other parts of the North Island will boost construction activity over the coming year and will add to cost pressures. Estimates of the extent of damage are still being developed. We'll review what this means for construction activity as the extent of damage becomes clearer over the coming weeks.
Further FB insert
Migration is recovering faster than expected
New Zealand's average annual population growth of c.+2% was the decade prior to the pandemic, boosted by high numbers of net new migrants, which was running at +30–35k. Since the borders closed population growth has been anemic, growing at +0.4% on average through 2021/22. New migrants typically go to Auckland while Aucklanders typically migrate to the regions. The lack of migration has caused the Auckland population to fall -1.1% from 2020 to 2022.
With the borders reopening in 2022, the return of migration has been faster than anticipated. For the three months to Nov-22, net migration was running at c.60k annualised, which is back at 2018/19 levels. Time will tell if this is a bow wave or something more sustainable. If this strength in net migration persists, this would equate to c.21k new dwellings annually (assuming 2.8 people per household) being required to meet demand. Importantly, net migration is strongest in the key home buying age: 30–49 range.
Hey share, FBU close at $5.50
That's pretty good — been a good week
No reason why the share price doesn't push on from here.
Methinks analysts will be doing some updates to their targets
Clear break out above the 100 day MA indicates this highly cyclical company could be worth a trade.
Good luck to holders.
It's been a good week alright. A lot of volume going through.
Looks like a lot of money is going to be spent on flood damage or maybe just expectation of a good result coming up.
Craigs overweight on FBU. Note out today.
Running against the grain
Overweight retained, share price bounces on weaker economic data
In our view, FBU remains undervalued, trading at 9.6x our forward 12-month EPS estimate and yielding a net return of 8%, impacted by the ongoing housing market downturn and a slowdown in the residential construction sector in NZ, given the country's aggressive monetary tightening cycle. However, with 4Q22 inflation and unemployment data both beating RBNZ's expectation set back in Nov-22, the market is seeing the prospect of a smaller rate hike in Feb-23 and a lower terminal rate in mid-2023, with major banks starting to cut mortgage rates. Should this eventuate (which we view as likely) it would result in a faster-than-expected pivot in the sentiment of the NZ property market and likely lesser impact on the residential construction industry, hence would lead to a re-rate of FBU's share price (notwithstanding the 8.5% rally over the past week). The market expects a strong 1H23 result to be delivered by FBU at its announcement on 15 Feb-23, with the key area of interest being a glimpse of its FY24 pipeline and outlook.
NZ's housing market - searching for the bottom
History suggests that NZ house prices have never reached bottom of the cycle before the end of a tightening regime, and there is no pattern we can learn from historical data to forecast when house price would trend up again (see page 6 for detail). Nevertheless, with banks starting to cut mortgage rates following the recent macro data release, we expect house prices to find a floor in 2H CY23 (down 12% from current level), based on consensus interest rate forecasts and our housing affordability analysis
New house builds in 2023 plummet - paywalled
https://www.nzherald.co.nz/nz/new-house-builds-plummet-this-year-with-some-companies-down-by-20-to-50-pc-in-wake-of-recession/P3FFDZCLVBADZFPOXABGMZA4OM/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338
Quote from: Basil on Feb 07, 2023, 12:19 PMNew house builds in 2023 plummet - paywalled
https://www.nzherald.co.nz/nz/new-house-builds-plummet-this-year-with-some-companies-down-by-20-to-50-pc-in-wake-of-recession/P3FFDZCLVBADZFPOXABGMZA4OM/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338
Multi unit / apartments and retirement villages activity going well
Indication of how kiwis changing housing needs
Auckland floods will delay construction downturn - paywalled
https://www.nzherald.co.nz/business/auckland-flood-damage-will-delay-construction-downturn/5XPTSDNNCRBSZKANVYK7BGBIQM/
Interesting article from live wire
This one's sure to surprise you! The region (and stocks) with the most compelling value right now
"You won't expect me to say this, but I've never seen value on offer as I have in New Zealand," Oberg said.
"And I think it's because their economy has been hit harder than ours."
In fact, around 10% of WAM Capital assets are currently invested in New Zealand-based or New Zealand-related stocks - names like Fletcher Building (ASX: FBU), Vulcan Steel (ASX: VSL) and Tourism Holdings.
In addition, building materials-related companies are also an interesting area of the market, Oberg said.
"The reason is analysts have really cut their numbers hard, as you'd expect, with house prices, approvals, and new housing falling off," he said.
"But again, we think that they've just cut too much and interestingly, looking at a company that's been around for a very long time, like Fletcher Building, it's trading on a PE of nine times at these depressed earnings levels."
Normally, as cyclical companies, when earnings are depressed, building materials will have higher valuations, he explained.
"At the moment, analysts expect earnings to come back in probably three or four years. We actually think they'll come back in two or three. So we like that sector, it looks very, very attractive," Oberg said.
Oberg from above says '"But again, we think that they've just cut too much and interestingly, looking at a company that's been around for a very long time, like Fletcher Building, it's trading on a PE of nine times at these depressed earnings levels."
Normally, as cyclical companies, when earnings are depressed, building materials will have higher valuations, he explained.
Imust have different numbers than Oberg - I reckon earnings (eps) are close to maybe even at the top of this cycle and then wnner would explain 'normally. as cyclical companies, when earnings are at the top of the cycle. building materials will have lower valuations (ie lowish PEs)
Never mind - one of us is right but we could compromise and say FBU should be about 6 bucks now
Half Year EBIT before the abnomal stuff as expected
But a profit DOWNGRADE for full year - guidance was $855m plus --- now about $800m
H2 profit down 10% on expectations
Never mind - that's how the cookie crumbles
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/406553/388329.pdf
Wonder how the extraordinary adverse weather impacts they talk about in January and February are going to affect other residential property developers, AKA retirement villages? Speaking of things "extraordinary" I see they're doing the old normalized profit trick and tucking away $150m construction costs provisions as a so called extraordinary or unusual item.
If something happens every other year or so is it really an extraordinary or unusual item or just part of their regular cyclical business?
Jenny Ruth did a piece on FBU this morning. Started of - 'Analysts at three different broking firms say Fletcher Building shares are undervalued, but the market is struggling to believe them.'
Essentially saying analysts reckon FBU share price should be well over 6 bucks so cheap as at the moment
After this mornings earnings downgrade the market was right after all
https://businessdesk.co.nz/article/opinion/fletcher-investors-try-to-find-the-bottom
Well bad weather in January and February results in downgrade.
Now expected to come in between $800 million and $855m, down from its previous guidance of $855m or more.
Will await Wednesday's announcement for more detail.
Still think that for the current price in the cycle that the downside is limited.
However it's a serial under performer and the cockroaches keep coming so it's not for everyone. Low debt and margin improving and decision made to exit high risk construction.
It's a hold for me and won't be adding.
the cheeky analyst at Jarden asked Taylor about Puhoi to Warkworth road saying "a lot of feedback there's something odd with the Puhoi to Warkworth contract".
Taylor said no problems - going to handover soon and the overrun in costs will be recovered.
NBR
https://www.nbr.co.nz/investment/fletcher-reassures-on-puhoi-to-warkworth-project/
https://www.stuff.co.nz/business/131145537/costs-come-under-the-microscope-as-businesses-prepare-for-a-downturn
Quote from: Waltzing on Feb 19, 2023, 02:24 PMhttps://www.stuff.co.nz/business/131145537/costs-come-under-the-microscope-as-businesses-prepare-for-a-downturn
Somber stuff - Taylor, "doesn't expect a big spike in demand after Cyclone Gabrielle and the earlier flooding in Auckland and surrounding areas. Instead, he says it will probably prevent the market from softening as quickly as it otherwise would have." Hard to head against the cyclicality of the industry.
Allan Gray keeps buying. Close to 10 percent. Fletchers and STU SHOULD do well from the storms.
https://www.nzherald.co.nz/business/shareholders-plan-class-action-against-fletcher-building-in-australian-court/BJ3Y64B4X5GOXPUICAR57GELCY/
Paywalled - Guts of it is a class action lawsuit is being filed over inadequate and untimely disclosures regarding their building and interiors division which lost close to a billion dollars late last decade.
Fletchers recent disclosure of another ~$150m of losses on the NZICC rebuild was a surprise to the market according to some analysts. FY24 and FY25 outlook is what some think should be more of a worry than this class action lawsuit which was lodged in the nick of time before the statute of limitations kicks in.
My thoughts. I think a certain law firm in Australia may be struggling to find work to do for its staff. That said the size of the losses were profoundly shocking and indicative of deep systemic issues within the company that may or may not have been resolved completely.
People should probably be more worried about the outlook ahead for this highly cyclical company and even further provisioning behind what some think is the "jinxed" international convention center.
Disc: No holding.
Basil ... I reckon market losing faith in Taylor
Lost his Midas touch .....halo less shiny ...or whatever ......and maybe credibility as well
Way FBU turnover CEOs maybe his tenure up and he moving on to be fix up man for somebody else.
Ross Taylor appears to be doing a reasonable job of getting FBU heading in the right direction albeit with headwinds. The previous CEO Mark Adamson's bonfire of shareholder value is casting a long shadow. The things FBU have done in the last few years since Taylor took over largely make sense to me. Not sure they will ever improve Australian asset performance to a reasonable level though. Looks like good value at these levels for long term hold with historical p/e of 8.2 and net dividend yield or 8.8%, recognising both of these metrics will be impacted by convention centre troubles and headwinds. And FBU does have a bit of a track record of clutching defeat from the jaws of victory.
A bit of a problem with black pipes in Oz
Just as well doesn't hit the Operating Profit ...unusual item and all that
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/409964/392649.pdfMatters
Craig's downgrade TP
FY24/25 consensus too bullish, sell-off/pull back = entry point
In this note we undertake a detailed scenario analysis of FBU's earnings over FY23/24/25 and test our base/bull/bear cases against consensus forecasts. Currently the market is trading FBU close to our bear case scenario, with our 'bear' FY24/25 EBITe 43%/56% below consensus (consensus more closely aligned with our bull case). We think any sharp sell-off caused by a near-term downgrade from FBU or the market (which we think is likely) may offer a good entry point for investors. Our channel checks and monitoring of construction activity, including Fletcher Living, suggest FY23 residential sales volumes are a challenge and discounting is underway. Furthermore, we think STU's recent sharp sales decline helps set the scene for potential downgrades from FBU heading into FY23 close / FY24, and downward revisions to broker estimates. That said, we see valuation support even under a bear case scenario with a DCF-based 12-mth TP above last close. We update our valuation, with our base case target price coming out at $5.09 (prev. $5.72), Neutral recommendation retained.
Fletchers say $700m to spend on organic opportunities.
Given where the cycle is, there will no doubt be opportunities out there for acquisitions. You will be aware that we recently acquired the TUMU distribution and Frame & Truss business and the Waipapa Timber business and are pursuing organic growth opportunities from within our businesses – altogether an envelope of $700m growth capex spend from FY23-26.
Well the cockroaches keep coming.
https://www.rnz.co.nz/news/business/495373/fletcher-building-adds-105m-to-provisions-after-audit-and-risk-review-of-convention-centre-project
FB say only $.10 cps post tax. No big deal, outperform. Trading well below Aust competitors. Nice divi coming. Plus won't be building these anymore as have learnt a lesson.
Quote from: Shareguy on Aug 09, 2023, 09:04 AMFB say only $.10 cps post tax. No big deal, outperform. Trading well below Aust competitors. Nice divi coming. Plus won't be building these anymore as have learnt a lesson.
James Hardie a great result the other day
FBU have always traded well below Oz competitors .....so always relatively cheap ....and probably will forever ......but then that's the inherent nature of the NZX v ASX
Quote from: Shareguy on Aug 09, 2023, 09:04 AMFB say only $.10 cps post tax. No big deal, outperform. Trading well below Aust competitors. Nice divi coming. Plus won't be building these anymore as have learnt a lesson.
Just as well the 10 cents doesn't count eh ...else on a PE of 12 the share price might go down $1.20
It does matter for me. The only thing that counts in my opinion is actual profit and EPS.
FBU say it is still pursuing recoveries (of potentially more than $100m). Um Um
My broker today said "don't sell" it's undervalued. Reporting soon.
Quote from: Shareguy on Aug 09, 2023, 02:28 PMIt does matter for me. The only thing that counts in my opinion is actual profit and EPS.
FBU say it is still pursuing recoveries (of potentially more than $100m). Um Um
My broker today said "don't sell" it's undervalued. Reporting soon.
With due respect shareguy if you valued' fbu on actual profit (over the years) you'd never invest in it
Like this year what will be the total of the things that don't count this year ....convention centre, leaky pipes etc etc ...quite a lot I reckon.
Your broker doesn't count those ...that's why he says undervalued isn't it.
Quote from: winner (n) on Aug 09, 2023, 04:01 PMWith due respect shareguy if you valued' fbu on actual profit (over the years) you'd never invest in it
Like this year what will be the total of the things that don't count this year ....convention centre, leaky pipes etc etc ...quite a lot I reckon.
Your broker doesn't count those ...that's why he says undervalued isn't it.
You're 100 percent right Winner. I Should never of invested in the first place. At the time I thought new management and the cockroaches had been exterminated. Was trading on attractive fundamental's. How wrong I was,however the SP has come up and I'm in the green... just. Looking for exit but think it's not now. Ross has made a good decision I think to exit vertical construction.
Results out..... EPS 30.0 v 53.5 LY, Dividend 34.0 vs 40.0 LY. net debt increased etc. etc.
https://www.nzx.com/announcements/416413
Fletcher Building today announced its audited financial results for the year ended 30 June 2023 (FY23). The company also announced a fully imputed final dividend of 16.0 cents per share.
- Revenue of $8,469 million, compared to $8,498 million in FY22
- EBIT before significant items of $798 million, up 6% from $756 million in FY22
- EBIT margin of 9.4%, compared to 8.9% in FY22
- Net Profit After Tax of $235 million (including significant items of $301 million), compared to $432 million in FY22
- Return on Funds Employed before significant items 17.1%, compared to 19.3% in FY22
- Cash flows from operations of $388 million, compared to $592 million in FY22
- Fully imputed final dividend 16 cents per share, bringing full-year FY23 dividend to 34 cps
NPAT $235m (pre-abnormal $536m) all broadly as expected but is a "disgrace and another failure" for Fletchers. The Final DPS of 16cps was lite bringing FY23 DPS to 34cps (consensus 39cps). There is no Guidance for FY24 at this stage but the commentary remains relatively upbeat with 1) Materials & Distribution focused on preserving operational gains as market reverts to mid-cycle levels.
The FY24 interim dividend will not be imputed due to lower cash tax payments.
In my opinion the company is not for long term investors and only a trading stock AT BEST. Very poor management who should be ashamed with a result so bad.
I'm looking for an exit as have lost patience. Hope the worst is over, but history shows there is a nest of cockroaches at this place.
Quote from: Shareguy on Aug 16, 2023, 11:48 AMNPAT $235m (pre-abnormal $536m) all broadly as expected but is a "disgrace and another failure" for Fletchers. The Final DPS of 16cps was lite bringing FY23 DPS to 34cps (consensus 39cps). There is no Guidance for FY24 at this stage but the commentary remains relatively upbeat with 1) Materials & Distribution focused on preserving operational gains as market reverts to mid-cycle levels.
The FY24 interim dividend will not be imputed due to lower cash tax payments.
In my opinion the company is not for long term investors and only a trading stock AT BEST. Very poor management who should be ashamed with a result so bad.
I'm looking for an exit as have lost patience. Hope the worst is over, but history shows there is a nest of cockroaches at this place.
Agreed. FBU used to be a solid performer paying moderate dividends and with predictable growth, but it is all over the place now, with constant downgrades. If you had bought in only about 7 years ago when the SP was over $10 you would have lost half your stake by now. Complacent, inept management who don't seem to know what is going on in their own company. Only for traders, as you say.
Agree with both you guys but it's also well worth remembering that the N.Z. shareholders association have taken issue with the size of the directors' fee pool in the past and lack of construction experience on the board. I also believe the C suite and senior management are egregiously overpaid considering their woeful performance over the years. It seems there is a caustic culture of entitlement in the company that runs very deep.
For anyone left who still thinks this is a great long term hold I recommend bringing up a long-term comparative chart of FBY with JHX (James Hardie in Australia). You will be profoundly shocked when you do. It simply doesn't stand up to scrutiny when brokers say this is cheap compared to its Australian peer group, many of whom are delivering sound growth over the long term across the business cycles whereas FBU is not and seems riddled with perpetual ongoing write-off's.
FBU has been a trade for long time...]
a buy when there is a big crash on market and then a sell...
Craig's and Jarden think FBU good buying
Jarden analyst Grant Swanepoel comments
that FBU's FY23 result was in line with EBIT
of NZ$798m and the FY24 earnings outlook,
whilst not explicit, was little changed from
June's investor day." The NZc34 dividend is
~2-3c light relative to market estimates,
with a payout of 59% at the low end of the
50-75% policy range.
Despite the legacy losses, Jarden consider
the balance sheet is not at duress risk and
that FBU is in a healthy position to manage
the continued slowdown.
"We modestly increase our FY24 EBIT
forecast from $683m to $699m, reduce our
dividend forecast from 34c to 32c and lift
capex." They reduce their target price from
$6.40 to $6.30. But retain their Buy rating.
looks like it will test the 12 months low
Craigs think it might be time.
BAKERS DOZEN CHANGE – We are making one change to our Bakers Dozen of 13 Stock Ideas (last discussed in this note on 31 August) – we are REMOVING CHORUS and ADDING FLETCHER BUILDING. Our Bakers Dozen has had a defensive bias all year but with the election around the corner and the likelihood of a change in Government that would be supportive of house prices we think now is the time to take some cyclical exposure with FBU trading close to its lows and CNU about to conclude its buyback.
Interesting... I have been thinking the same thing. The only thing is they will find a way to stuff it up! This one for me now is a trading stock...
Craigs think it might be time. - Shareguy (https://stocktalk.co.nz/index.php?action=profile;u=3)
I would be waiting to see if it finally breaks bottom trend line, but it's close.
FBU_2023-09-19_19-58-25.png
Well it's official. There is a nest of cockroaches and they just keep coming.
Aus firm BGC say Iplex will cost $700m to fix. A little more than the $16m provision.
Quote from: Shareguy on Oct 11, 2023, 06:14 PMWell it's official. There is a nest of cockroaches and they just keep coming.
Aus firm BGC say Iplex will cost $700m to fix. A little more than the $16m provision.
Oh my goodness...the board should be deeply embarrassed :-*
I'm also calling it that we haven't seen the last of the Sky City Convention centre losses by any means, either. That's the gift that simply never seems to stop giving, (for the contractors involved). A BIG nest of cockroaches, as you say....but no worries, next year they will simply take all this as below the line extraordinary adjustments and claim that normalized operating profit has never looked better and most of the analysts will fall for the same B.S. they fell for this year and stick with their buy recommendations. Eventually they will be right😉
Quote from: Buzz on Oct 11, 2023, 06:54 PMDid you catch that it is more probably a product failure, rather than installation problem? No effect on FBU if so.
Can't comment on the Sky convention centre, not enough information to make a call on that yet, so doesn't seem worth speculating on.
Isn't installation problem a better outcome for FBU and a product failure isn't what FBU want to hear
Or did I misread your post
The announcement came out at 10.13am re shelving the director pool increase.
I thought to myself that's interesting is there some more bad news coming. Sure enough 12.42pm the pipes burst.
My question is.
Why did they allow 2 hours of trading on the NZX when I suspect that the withdrawal of the directors increase was not a coincidence.
I would suggest that this will be downplayed and fought tooth and nail. However when you look at Fletchers history of getting these things right one must be very, very sceptical.
How much money has been written off over the years?. I tried to work it out but my abacus did not go that high.
Steel & Tube Holdings Limited
Steel and Tube pleaded guilty to 24 charges of misleading conduct and false representations in connection with its "seismic grade" steel mesh products known as SE62 mesh. The company misled consumers by representing that the mesh had been tested and complied with the relevant standard
Did Fletchers ever represent that their Pro-Fit pipes complied with the relevant standard?
If no then they are all sweet 🤔
April article -
https://www.watoday.com.au/national/western-australia/manufacturer-iplex-blamed-for-faulty-pipes-in-1200-wa-homes-20230418-p5d1gf.html
Hmmmm.....
Competing with whs for title of worst managed/governed major nzx company along with outrageously overpaid management given extremely poor performance
Might be an idea to get someone on the Board with construction and building products experience - a bit of expertise can be helpful
It would appear SG that these companies attract a certain type of personality and it not entirely trust worthy....
its a take no prisoners raid to the C Suite...
taking there time replying.....hard to write positive spin on this situation and keep directors integrity in place.....I thought this dog had fleas but now it has mange. Lawyer gonna make a lot of money
Quote from: Shareguy on Oct 11, 2023, 06:14 PMWell it's official. There is a nest of cockroaches and they just keep coming.
Aus firm BGC say Iplex will cost $700m to fix. A little more than the $16m provision.
and isnt that AU$?
Analysts briefing at 2.00p.m. today Friday 13th. Some people reckon when the 13th falls on a Friday that's black Friday and unlucky. https://www.nzx.com/announcements/419907
My opinion: Even before this fiasco I wouldn't touch FBU with a 40-foot barge pole. Its long-term performance is an absolute disgrace.
For a laugh I pulled out these EBIT numbers from FBU Trend Statements in AR
From 2009 to 2023 'significant items' have totalled $2.2 billion .....but they touted EBIT (before these) of $8.3billion in same period.
One could say that over the years about 25% of profits have been written off in subsequent years ...wow 'extraordinary' significant items for 2024 will make table look worse
Incredible
IMG_5513.jpeg
What an incredible track record of ongoing fiasco's from the very highest paid board and CEO on the NZX.
Quote from: Basil on Oct 13, 2023, 10:46 AMWhat an incredible track record of ongoing fiasco's from the very highest paid board and CEO on the NZX.
Yes it appears that top Management don't have a good grip on what is going on in their various businesses given the consistent negative surprises. There is a case for breaking the businesses up into discrete manageable units with hands on management and eliminating the costly and seemingly ineffective corporate overhead. There are some excellent businesses within the FBU stable but the series of disasters throughout the group makes it hard to invest.
Yeh, I agree. There are some great units that make up FBU. Time to change tack, break it up and get it pumping.
Quote from: Mos on Oct 13, 2023, 10:59 AMYes it appears that top Management don't have a good grip on what is going on in there various businesses given the consistent negative surprises. There is a case for breaking the businesses up into discrete manageable units with hands on management and eliminating the costly and seemingly ineffective corporate overhead. There are some excellent businesses within the FBU stable but the series of disasters throughout the group makes it hard to invest.
Guru analysts have often over the years said FBU would be worth more broken up .....like sum of the parts greater than the whole
I don't understand how they get to release market sensitive information at 2:00 (with 3 hours of trading left) and then don't remove the trading halt until Monday morning.
Quote from: Minimoke on Oct 13, 2023, 11:44 AMI don't understand how they get to release market sensitive information at 2:00 (with 3 hours of trading left) and then don't remove the trading halt until Monday morning.
It's to give ounters enough time to 'read between the lines' to work out what they really saying
Question though will anybody really believe it's not our fault and any impacts are manageable
U think they would open it up for a couple of hours before the weekend. Then hope everyone cools their jets over the weekend.... Surely going under $4.
Over bending and fixing pipe in mortar seems to be main causes of pipe failure. Soilid review. Seems reasonable to me. Can't see why market can't now open.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/419965/405124.pdf
Agree with Minimoke. It looks like a credible rebuttal to me.
Yes on the face of it, it seems to be a strong rebuttal. Certainly paints a different picture, one of BCG desperately slinging mud to try and deflect from their installation liability.
The level of detail provided is to be commended. I note they say the issue is localised to Perth. Was the training and installation Instuctions provided by the Iplex rep and management for Perth to the plumbing merchants correct. There are a number of installers in Perth that have had issues, not just BGC.
I'm sceptical and don't like that the $15m pot is now classed as "interim"
Unfortunately as history shows with this company what they allow to fix issues is often way way out. Over $1billion of significant items in just 10 years is a disgrace.
Are we really thinking that Fletchers this time are correct.........
Disc, I only have a small holding left, thank goodness.
The reality is, for legal reasons, we were always going to get a good rebuttal.
Somewhat skeptical that this business would set aside $15m just as a goodwill gesture
Quote from: snapiti on Oct 13, 2023, 04:44 PMSomewhat skeptical that this business would set aside $15m just as a goodwill gesture
Would $15m be the expected cost of defending the claim...rather than FBU's view of settling it?
Quote from: Ferg on Oct 13, 2023, 06:54 PMWould $15m be the expected cost of defending the claim...rather than FBU's view of settling it?
Nope, they've provisioned for repair costs, not legal expenses.
yep the $15m is set aside for repairs, some of which has already been spent.
Most unusual for a company to stump up for repairs when they appear adamant they are not at fault.
Not unusual for a company to doggedly refute product fault, the bigger the problem the bigger the rebuttal is the normal process.
Don't own FBU because of all the fleas it seems to produce.
Market appears unconvinced by explanation down 9.2% to $4.45
10 years ago FBU's share price was $9.50.
5 """""""""""""""""""""""""""""""" $6.00
1 year'''''''''''''''''''''''''''''$4.80
Today...............................$4.45.
The down trend remains intact.
Quote from: lorraina on Oct 16, 2023, 12:24 PM10 years ago FBU's share price was $9.50.
5 """""""""""""""""""""""""""""""" $6.00
1 year'''''''''''''''''''''''''''''$4.80
Today...............................$4.45.
The down trend remains intact.
Here is a graph for you Lorraina, going back to the turn of the century. But the dividends must have been good because the capital growth hasn't!!
Quote from: Sideshow Bob on Oct 16, 2023, 02:09 PMHere is a graph for you Lorraina, going back to the turn of the century. But the dividends must have been good because the capital growth hasn't!!
From Morningstar data a $1,000 invested in FBU in August 2014 is now worth $909 (Inc divies reinvested)
Not a long term hold stock but a good trading one
Cool eh
Quote from: lorraina on Oct 16, 2023, 12:24 PM10 years ago FBU's share price was $9.50.
5 """""""""""""""""""""""""""""""" $6.00
1 year'''''''''''''''''''''''''''''$4.80
Today...............................$4.45.
The down trend remains intact.
Extraordinary...and that from the highest paid board and CEO on the entire NZX.
Quote from: Basil on Oct 16, 2023, 08:04 PMExtraordinary...and that from the highest paid board and CEO on the entire NZX.
Jeez - lucky they are dual listed
Quote from: Basil on Oct 16, 2023, 08:04 PMExtraordinary...and that from the highest paid board and CEO on the entire NZX.
And the board wanted their fees increased.
Probably on the basis of all the extra work because the number of c***-up's they seemingly have on a regular basis!
From Warren Buffett;
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
Who benefits from the new GOVT?
Looks like property development companies ?
https://www.nzherald.co.nz/nz/political-roundup-whos-advising-the-new-national-government/3IERNFFYRVAVFFSYCAYWGY6BSM/
Thought this was interesting from the AGM
Talking about how the company has evolved over
the last 5-6 years, he said, "In 2018, our underlying
businesses in New Zealand had strong market positions,
but they had been underinvested and margins
were on the decline.
"A key reason for this was our international business,
which was capital-hungry, spread across about
30 countries, and so stretched both our balance sheet
and board and management attention.
"Our businesses in Australia were contributing a
good proportion of revenue, but close to nil margins.
They were reporting into three separate operating
divisions, which served to mask their underperformance
across many operational dimensions.
"Combined with the issues in Construction, we
had a challenged Australia business which was dragging
down our overall margin.
So how many board members from that time are still taking a pay check....
https://www.youtube.com/watch?v=3JxSLnvxP0w
Yep. 😂😂
Meanwhile over the ditch at James Hardie https://www.jardendirect.co.nz/app/news/urn:newsml:reuters.com:20231107:nL4N3C85PO
Quote from: Basil on Nov 08, 2023, 02:47 PMMeanwhile over the ditch at James Hardie https://www.jardendirect.co.nz/app/news/urn:newsml:reuters.com:20231107:nL4N3C85PO
WOW amazing
'RECORD' word count = 30
Market loves result ... +13%
Reentered coils, expect to exit consolidation box / coil after touching top trendline around 5.15.FBU_2023-11-12_14-50-34.png
anyone else got the feeling this is destined to retest the recent low of $4.30
Quote from: snapiti on Nov 21, 2023, 06:17 PManyone else got the feeling this is destined to retest the recent low of $4.30
Sure looking like it, trading under even the very short term EMA's and flirting with the double bottom at $4.20 https://invst.ly/12c224
Haven't been in this since taking a nice profit at $7.16 in July 2021 after the Covid rebound.
Hideously cyclical, probably never get back to the $13 highs of 2007, but good for momentum traders who can act on the TA.
I find FBU a little hard to value.....I suspect the current company performance is somewhat enhanced from the reality that the building down turn has been slower than most poeple think to filter through based on pent up work demand.
I believe FBU SP may suffer when the realities of the current down turn have really flowed through.
On another note, have to de somewhat careful what I say, I am guessing their iplex pipe NZ division sales are way way down and also guessing they significantly discounted pipe during this year to lower inventory.
Will the new INFRA TONKA TOY put another one on the BQ pull this stock back into the blue skys....
https://www.thepost.co.nz/a/nz-news/350135792/labours-legacy-burns-what-will-ashes-sustain?utm_source=stuff_website&utm_medium=stuff_referral&utm_campaign=mh_stuff&utm_id=mh_stuff
"New Infrastructure Minister Chris Bishop had already signalled he will be enlisting the Infrastructure Commission and a souped up Crown Infrastructure Partners (to be renamed the National Infrastructure Agency) to coordinate the Government's infrastructure planning and delivery."
There is the 200 billion hole in the Transport policy and how big is the hole in the new stuff ... forget the new space port project ...
I am looking to purchase some more FBU, suspect the upcoming result will only be seen as ok by the market but the outlook will be somewhat muddy and the SP will suffer from lack of clarity giving me another chance at purchasing more at 4.35 or 4.50 with divi attached
Quote from: snapiti on Jan 03, 2024, 11:36 AMI am looking to purchase some more FBU, suspect the upcoming result will only be seen as ok by the market but the outlook will be somewhat muddy and the SP will suffer from lack of clarity giving me another chance at purchasing more at 4.35 or 4.50 with divi attached
Tends to drop to 420/435 on not so good news
You could be buying again crackity
Might get to 5 bucks before announcement
not to much chatter on here about FBU, I see the sp is acting nervous ahead of upcoming 6 monthly.....not surprising to me
Another sign today to say the going is tough in the building industry with one of the more established franchise builders going bust in Auckland
Can FBU avoid clutching defeat from the jaws of victory this time? I hope so as I own a few. They have some very good businesses with competitive advantage but have a knack of scoring own goals.
Its a Trade as it now has a history of "Own Goals"!
Housing market...
https://www.nzherald.co.nz/business/residential-building-consents-down-25-off-record-high/SYECSENNWJGIPILFQGY3UUQ4LM/
Quote from: Waltzing on Feb 03, 2024, 09:27 AMIts a Trade as it now has a history of "Own Goals"!
Housing market...
https://www.nzherald.co.nz/business/residential-building-consents-down-25-off-record-high/SYECSENNWJGIPILFQGY3UUQ4LM/
Number of housing consents matter but numbers of starts & completions matter even more.
The record consent high in 2022 was just that - a number as many of the consented developments, especially apartments and terrace houses, did not proceed.
Case in point - developer I know well (arranged 2nd tier finance for them in 2021) has not gone ahead with their consented development of 28 remaining units in Kumeu and 19 units in South Auckland, after having completed 22 units in Kumeu.
The 22 completed units are still on the market. The developer dropped their asking prices by 25% with no sale success.
Quote from: Teitei on Feb 03, 2024, 10:01 AMNumber of housing consents matter but numbers of starts & completions matter even more.
The record consent high in 2022 was just that - a number as many of the consented developments, especially apartments and terrace houses, not proceeding.
Case in point - developer I know well (arranged 2nd tier finance for them in 2021) has not gone ahead with their consented development of 28 remaining units in Kumeu and 19 units in South Auckland, after having completed 22 units in Kumeu.
The 22 completed units are still on the market. The developer dropped their asking prices by 25% with no sale success.
I noticed - pretty ugly and bad designed units for sale in Kumeu. Some look like leaking building crisis mach 2. Hope your pal not trying to sell one of those soleless mass productions where some clueless architect decided to glue plenty of cubes without roof and (obviously) without roof overhang together in the hope that some brainless fool will buy them?
On the other hand ... leaking home crisis must have been really good for the NZ buidling industry - shortening the lifetime of an average building from 50 years to 10 years clearly must increase the buidling actiivitiy ... so maybe - this is the future?
Stats don't always show whats going on. Consents can sit for up to two years before the builder or developer has to do anything.
In Chch thru my work place our quotes have been at record levels as with Acceptances, however the builder or developer are sitting until Interest Change. Building costs won't come down by any meaningful margin to make a significant difference to builder/purchaser.
We still have jobs sitting in system from late 22. Builder is only just starting now.
Another $180m of abnormals .......don't affect earnings so no worries
Announced today in hope analysts taking a long weekend and won't notice lol
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/425713/412041.pdf
Quote from: winner (n) on Feb 05, 2024, 08:50 AMAnother $180m of abnormals .......don't affect earnings so no worries
Announced today in hope analysts taking a long weekend and won't notice lol
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/425713/412041.pdf
Not going to work as FBU is now effectively an ASX stock listed on NZX.
Quote from: Teitei on Feb 05, 2024, 09:10 AMNot going to work as FBU is now effectively an ASX stock listed on NZX.
ASX opens and really down she goes!
Ouch!
Gosh it's never ending with this company. Surprised the SP is not under $4.
Quote from: Shareguy on Feb 05, 2024, 02:23 PMGosh it's never ending with this company. Surprised the SP is not under $4.
Never ending. Truly appalling performance over the years and the directors and management are the very highest paid executives on the entire NZX.
Not good reading. Talk of ability to fund dividends. Gosh is it any wonder that property is a favourite for wealth building. Another quality NZX company
https://www.nzherald.co.nz/business/analysts-unhappy-with-fletchers-180m-provision-from-nzicc-car-parks/ULRBTU7Q4FHDPA6S4L73DI62DA/
I think unfortunately we are now at the point where management credibility is close to zero.
Quote from: Mos on Feb 05, 2024, 05:04 PMI think unfortunately we are now at the point where management credibility is close to zero.
There will be another write down to come for FY24 in due course and then another one when its finally completed in FY25. Pretty cool they can just keep sweeping these "one-off's" under the carpet.
Having never been silly enough to own FBU shares I can stand back objectively and value the company.
First up, forget all the talk of growth, its complete B.S., this is a no growth pure cyclical company beset with huge issues run by the greediest team of management and board you can possibly imagine.
The real value is only a multiple of 8 times eps. (No growth PE Ben Graham uses), adjusted for 10 year rate at 4.7% Even if you are extremely charitable and I'm not suggesting by any means you should be, and treat all extraordinary items as non-repeating, (really there is real madness in this approach), average "normalised" earnings over the last 6 years, then attaching a multiple of 8 suggests fair value is only $3.20 by my calculations.
Looking at actual earnings after all the endless write-downs and applying a multiple of 8 times the average real earnings for the last 6 years gives only $1.13.
The real value is probably somewhere in the middle. I think anyone paying north of $3 is buying into all the management B.S. that all their problems are behind them and we should believe this why ?...because every other claim they've made to that effect before has been complete and utter B.S..
You're right Mos, their credibility is in the toilet but they're still being paid like the Saudi Royal family. I predict the culture of greed will never change because the sense of entitlement starts right at the top. It makes me annoyed investors have to tolerate the garbage B.S. excuses FBU come up with.
Some good points Basil. Hard to disagree with the thrust of your argument. What really frustrates me is that there are some very good businesses hidden in there. But the shitshow continues. Personally I hold the view that FBU should exit all forms of construction as ever since Mark Binns left they have been truly awful at it. When it comes to construction, they are the chump in the room. I was very doubtful about the suitability of the Board as they have minimal construction and building industry experience. Unfortunately, I was not wise enough to act in accordance with this and made the mistake of buying a few at "low prices", which was a mistake.
Quote from: Mos on Feb 05, 2024, 06:46 PMSome good points Basil. Hard to disagree with the thrust of your argument. What really frustrates me is that there are some very good businesses hidden in there. But the shitshow continues. Personally I hold the view that FBU should exit all forms of construction as ever since Mark Binns left they have been truly awful at it. When it comes to construction, they are the chump in the room. I was very doubtful about the suitability of the Board as they have minimal construction and building industry experience. Unfortunately, I was not wise enough to act in accordance with this and made the mistake of buying a few at "low prices", which was a mistake.
C'mon Mos ...building things is what they are all about
But even in early days they incurred 'significant' items .... From the NZ Encyclopedia ......James Fletcher formed a house-building partnership with Bert Morris in 1909. They soon moved into construction work, taking on projects that were often at the limit of – and even beyond – their capabilities. A municipal swimming pool built in Dunedin had to be closed immediately after it opened so that Fletcher could work out how to stop the water leaking out.
Over a century later nothing seems to have changed
Quote from: winner (n) on Feb 05, 2024, 07:04 PMC'mon Mos ...building things is what Fletchers are about
They built the first state house in NZ ...in the 1930's out at Miramar in Wellington ....still proudly standing
Probably had people who understood construction then - not like the current Board and Management team. Construction a very hands on business where knowledge must be deep and risks well managed. Not suited to generalists, accountants and lawyers, and ex bankers in my view.
the company is a great breeding ground for fleas
Quote from: Basil on Feb 05, 2024, 05:38 PMThere will be another write down to come for FY24 in due course and then another one when its finally completed in FY25. Pretty cool they can just keep sweeping these "one-off's" under the carpet.
Having never been silly enough to own FBU shares I can stand back objectively and value the company.
First up, forget all the talk of growth, its complete B.S., this is a no growth pure cyclical company beset with huge issues run by the greediest team of management and board you can possibly imagine.
The real value is only a multiple of 8 times eps. (No growth PE Ben Graham uses), adjusted for 10 year rate at 4.7% Even if you are extremely charitable and I'm not suggesting by any means you should be, and treat all extraordinary items as non-repeating, (really there is real madness in this approach), average "normalised" earnings over the last 6 years, then attaching a multiple of 8 suggests fair value is only $3.20 by my calculations.
Looking at actual earnings after all the endless write-downs and applying a multiple of 8 times the average real earnings for the last 6 years gives only $1.13.
The real value is probably somewhere in the middle. I think anyone paying north of $3 is buying into all the management B.S. that all their problems are behind them and we should believe this why ?...because every other claim they've made to that effect before has been complete and utter B.S..
You're right Mos, their credibility is in the toilet but they're still being paid like the Saudi Royal family. I predict the culture of greed will never change because the sense of entitlement starts right at the top. It makes me annoyed investors have to tolerate the garbage B.S. excuses FBU come up with.
Unfortunately I am a slow learner and made the mistake of buying in to this "shit show" again. Luckily not a big position but still it hurts. I think it's due a name change "Fletcher destruction" or similar. I agree there's going to more pain.
Held on Support line and bottom of consolidation box, if price breaks those then there is not much stopping it from having a $2.XX in front of price.
FBU_2024-02-06_09-28-16.png
Quote from: Shareguy on Feb 06, 2024, 08:31 AMUnfortunately I am a slow learner and made the mistake of buying in to this "shit show" again. Luckily not a big position but still it hurts. I think it's due a name change "Fletcher destruction" or similar. I agree there's going to more pain.
That's the temptation and trap it's so easy to fall into. It's gone down heaps, it must be cheap now. Zooming out and looking at the long history to see if there's any real growth over time or not and then if not, applying a no growth PE of 8.5 (Ben Graham when 10 year Govt stock rate is 4.0%), adjusted for whatever the 10 year Govt stock rate is now, has saved me an absolute fortune over the years.
Quote from: Cod on Feb 06, 2024, 09:32 AMHeld on Support line and bottom of consolidation box, if price breaks those then there is not much stopping it from having a $2.XX in front of price.
FBU_2024-02-06_09-28-16.png
I get the feeling there is to much muddy waters to stop a further meaningful decline in SP.....would not be in a hurry to buy right now
I get the feeling there is to much muddy waters to stop a further meaningful decline in SP.....would not be in a hurry to buy right now
Volume by price lines (right hand side) offer little resistance to fall, however price candle did bounce off of the support line leaving a small candel tail, if i was a holder (Shareguy) and price bounced again, like it did after the pipe issue, i would get out once it reached the bottom upward sloping trend line, with a stoploss at 4.00 NZD as the fractal is just lower highs and fixed floor, but the floor can easily give way.
me thinks this will eventually (next 3 months)trade with a 3 in front of it,suspect current support level around 4.20 will turn into a resistance level
Most people didn't read the footnotes in Ben Graham's book where he mentions a formula he played around eith
The footnote says that this formula does not give any real intrinsic value for a stock.
Craig's skeptical about possible capital raise and says
"where there's smoke there's fire"
And todays Herald article about Iplex is not going to help either
https://www.nzherald.co.nz/business/western-australia-government-probes-injuries-in-homes-with-fletchers-iplex-pipes/UFYVTIAXIRDIBFVK7TGEPPR2HU/
Iplex the next NZICC that dogs them for years?
Quote from: Basil on Feb 07, 2024, 02:37 PMIplex the next NZICC that dogs them for years?
Also have exposure to stuff re Punoi Warkworth if things don't go their way
Interesting comparing how companies in the same sector have performed in Aussie v New Zealand.
10 years ago James Hardie and Fletcher building were similar prices.
2014 JHK ~ $12 and FBU ~ $9
2024 JHX ~ $59 and FBU ~$4.20
5 times your money in JHX over ten years but FBU has more than halved.
"Staggering" performance by the highest paid board and senior management team in New Zealand.
Interestingly, punters lining up in droves for FBU, #1 stock bought on the NZX by Jarden Direct clients last week. That and HGH, real winners.
Wonder what will be #1 next week ? Maybe OCA because you "can't lose" eh, now its under 70 cents ;)
Quote from: Basil on Feb 07, 2024, 03:49 PMInteresting comparing how companies in the same sector have performed in Aussie v New Zealand.
10 years ago James Hardie and Fletcher building were similar prices.
2014 JHK ~ $12 and FBU ~ $9
2024 JHX ~ $59 and FBU ~$4.20
"Staggering" performance by the highest paid board and senior management team in New Zealand.
Interestingly, punters lining up in droves for FBU, #1 stock bought on the NZX by Jarden Direct clients last week. That and HGH, real winners.
Wonder what will be #1 next week ? Maybe OCA because you "can't lose" eh, now its under 70 cents ;)
I thinks it time for a new CEO and new board and the sooner the better.
Quote from: Shareguy on Feb 07, 2024, 04:05 PMI thinks it time for a new CEO and new board and the sooner the better.
Agreed. And any incentive payments made to Management in the last few years should be clawed back. Shareholders paying for terrible performance.
A takeover offer from an outfit that knows how to run building materials and construction businesses may be the best hope for recouping some shareholder value.
KiwiSaver provider, Simplicity, (holder of 7.25m Fletchers shares) are less than happy with the Board and Management :
www.thepress.co.nz/business/350169318/simplicity-calls-greater-scrutiny-fletcher-buildings-board (http://www.thepress.co.nz/business/350169318/simplicity-calls-greater-scrutiny-fletcher-buildings-board)
With the risks to the downside. Their debt level and a history of poor performance I fail to see value at anything near current price.
Yeap, could quite conceivably halve again from here and frankly deserves too based on average earnings inclusive of the ever-present write-downs.
According to annual report. CEO was paid $3.7m for FY23 a big reduction from FY22 of $6.5m.
The board are also paid very well with the chair on $391k with most getting close to $200k
Absolute incompetent board that needs to go in my opinion.
Quote from: Shareguy on Feb 07, 2024, 04:05 PMI thinks it time for a new CEO and new board and the sooner the better.
But they tried that before - and look what they got for it?
Do they need to break it up? To big and inefficient
Quote from: Ricky Bobby on Feb 08, 2024, 10:28 AMDo they need to break it up? To big and inefficient
Plenty of much bigger companies in the game in Australia that do well. I agree though breaking it up to unlock value is probably the best outcome for shareholders. Current management not up to the task and I suspect more write downs to come with a capital raise not off the cards.
Quote from: LoungeLizard on Feb 07, 2024, 05:17 PMKiwiSaver provider, Simplicity, (holder of 7.25m Fletchers shares) are less than happy with the Board and Management :
www.thepress.co.nz/business/350169318/simplicity-calls-greater-scrutiny-fletcher-buildings-board (http://www.thepress.co.nz/business/350169318/simplicity-calls-greater-scrutiny-fletcher-buildings-board)
[/quote
Pity they are passive investors , should be dumping the lot .
Is this a joke. Might as well copy and paste from 10 years ago.
Why are these fund managers investing in FBU.
https://www.nzherald.co.nz/business/fletcher-building-180m-extra-for-nz-international-convention-centre-car-parks/VBCS4LKOPJEQXIR22JSGUDB3LI/
Quote from: Mos on Feb 07, 2024, 05:01 PMA takeover offer from an outfit that knows how to run building materials and construction businesses may be the best hope for recouping some shareholder value.
Agreed Mos and probably the only hope but then the board in their "infinite wisdom" would say the offer is far below intrinsic value and reject it out of hand. The real reason is they wouldn't want their trough taken away that they keep gorging themselves from.
Just been speaking to my broker who said to me don't sell your FBU at this price and to wait. Have decided to take his advice and wait. No more next week I guess.
Quote from: Shareguy on Feb 09, 2024, 10:50 AMJust been speaking to my broker who said to me don't sell your FBU at this price and to wait. Have decided to take his advice and wait. No more next week I guess.
Well, if your broker has made you lots of money over the years then take their advice on board.
Quote from: Shareguy on Feb 09, 2024, 10:50 AMJust been speaking to my broker who said to me don't sell your FBU at this price and to wait. Have decided to take his advice and wait. No more next week I guess.
In the meantime your broker is off loading his personal holding, his parents and the family trusts holdings
Quote from: snapiti on Feb 09, 2024, 01:35 PMIn the meantime your broker is off loading his personal holding, his parents and the family trusts holdings
Maybe 😂😎
From: NZX Product Operations
Date: Monday, 12 February 2024
Subject: Fletcher Building Limited ("FBU") -- Trading Halt of Securities
Message:
NZ RegCo advises that it has placed a trading halt on Fletcher Building
Limited ("FBU") ordinary shares at the request of the issuer. The trading
halt was placed at 2:40pm today, Monday, 12 February 2024.
FBU has requested the trading halt to allow it to finalise earnings guidance
which it proposes to release to the market, which is likely to materially
vary from current analyst forecasts. The information to allow FBU to do this
will arise as the Board and sub-committee of the Board finalise FBU's half
year accounts.
The halt will remain in place pending the release of an announcement by the
issuer, or midday on Wednesday, 14 February 2024.
Please contact NZX Product Operations on +64 4 496 2853 or
productoperations@nzx.com with any queries.
Needs to be done if guidance is materially HIGHER than current analyst forecasts.
Quote from: winner (n) on Feb 12, 2024, 03:24 PMNeeds to be done if guidance is materially HIGHER than current analyst forecasts.
lol.....realistically a dog that is covered in fleas for to long will eventually end up with mange.....many of their divisions have been performing worse than expected.
One has to understand FBU have been performing under par during a decade of tail winds, now they are facing headwinds one can expect poor results IMHO
Quote from: Crackity on Feb 12, 2024, 03:54 PMCEO off out the door too apparently 8)
Quote from: Crackity on Feb 12, 2024, 03:54 PMCEO off out the door too apparently 8)
But many people think he's great and done an awesome job ....defended him to the hilt
I for one thought he was a bad choice to start with ......friend of a Board member wink wink nudge nudge
Should have gone a few years ago
Quote from: Shareguy on Feb 09, 2024, 10:50 AMJust been speaking to my broker who said to me don't sell your FBU at this price and to wait. Have decided to take his advice and wait. No more next week I guess.
That didn't age well
Quote from: Basil on Feb 05, 2024, 05:38 PMThere will be another write down to come for FY24 in due course and then another one when its finally completed in FY25. Pretty cool they can just keep sweeping these "one-off's" under the carpet.
Having never been silly enough to own FBU shares I can stand back objectively and value the company.
First up, forget all the talk of growth, its complete B.S., this is a no growth pure cyclical company beset with huge issues run by the greediest team of management and board you can possibly imagine.
The real value is only a multiple of 8 times eps. (No growth PE Ben Graham uses), adjusted for 10 year rate at 4.7% Even if you are extremely charitable and I'm not suggesting by any means you should be, and treat all extraordinary items as non-repeating, (really there is real madness in this approach), average "normalised" earnings over the last 6 years, then attaching a multiple of 8 suggests fair value is only $3.20 by my calculations.
Looking at actual earnings after all the endless write-downs and applying a multiple of 8 times the average real earnings for the last 6 years gives only $1.13.
The real value is probably somewhere in the middle. I think anyone paying north of $3 is buying into all the management B.S. that all their problems are behind them and we should believe this why ?...because every other claim they've made to that effect before has been complete and utter B.S..
You're right Mos, their credibility is in the toilet but they're still being paid like the Saudi Royal family. I predict the culture of greed will never change because the sense of entitlement starts right at the top. It makes me annoyed investors have to tolerate the garbage B.S. excuses FBU come up with.
This post will age well. I make no bones about it. This stock deserves to trade with a 2 as the first number. Its a no growth dog riddled with fleas and mange and many other problems lurking below the surface. Frankly I find it astonishing that more analysts don't zoom out like I have and look at the big picture rather than listening to vastly overpaid management's almost endless talk and excuses.
Well I had another look at it over the weekend and sold the majority today. Unfortunately a loss but not major.
I suspect a part of the material change will come in the form of divi announced as well.
Thought this would trade with a 3 in front of it sooner rather than later, perhaps beagle is right and we will see a 2 in front soon, I do have a few shares but nothing to painful in the scheme of things and have held off buying any meaningful amounts because of the lack of clarity.....the shares I own are in a divi portfolio with tight criterea needed to be meet to continue to hold.
Quote from: snapiti on Feb 12, 2024, 03:54 PMlol.....realistically a dog that is covered in fleas for to long will eventually end up with mange.....many of their divisions have been performing worse than expected.
One has to understand FBU have been performing under par during a decade of tail winds, now they are facing headwinds one can expect poor results IMHO
I think that sums it up very well.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02771572-2A1504380
The ceo and board need to go in my opinion. Makes sense given the issues to can the dividend. When you have WA building and energy saying that the Iplex issues is not workmanship or an installation issue only can mean bad news for FBU. Possible huge impairment coming Wednesday.
Your broker did you so dirty @shareguy
Would like to see FBU pare back to focus just on building materials supply in NZ. Stop the disastrously costly pretence that they have any competence in construction (since Mark Binns left the building) and exit Australia where they have never earned a satisfactory return on capital and regularly get their asses handed to them as the chump in the room. Also on the wish list, pay new management (once they have got rid of this lot) as mere mortals not gods.
From Craig's this morning - sums it up quite well...
FBU – Fletcher Building ... where does one start?! Extraordinary developments yesterday for this beleaguered company that went into a Trading Halt at 2.58pm in NZ (and 18min later in Australia). The NZX press release noted the halt was to "finalise earnings guidance ....that is likely to materially vary from current analyst forecasts" (consensus EBIT for FY24 $675m). FBU reports tomorrow and the halt will be lifted by midday at the latest. Weirdly, there was a separate detailed release to the ASX (why two different releases?) that contained the following highly unusual statement; "In addition, it is possible that, given the matters to be considered at the Board meeting, the CEO of FBU will consider his position with FBU with this to be announced when his decision is made". Press commentary this morning has picked up on the lack of synchronisation with the timing of the NZX/ASX trading halts and disparate exchange releases. It has also questioned why FBU was not in a position to heed a warning last Monday when it squeezed in a further SKC Convention Centre provision prior to Waitangi Day....we now await tomorrows result with interest as the release (including a potential CEO exit) suggests this may not be a borderline (8-12%) continuous disclosure issue but rather something more malign. The Australian is now questioning the future of the CEO, CFO and Chair of FBU after a long litany of (largely) legacy issues have continued to haunt the company. Any material fall in underlying operating earnings (cf to non-cash provisions) will naturally put credit metrics under pressure and could lead to yet another Balance Sheet reset and dilutive capital raise "at the bottom" ... watch this space with FBU closing on the ASX at A$3.70 (NZ$3.94) .... Excluding COVID 'capitulation day' (23 March 2020) the FBU share price has not been this low in 20 years....
I cant but help think that a trading halt just two days out from the realease of results that is based on material earnings cha ge simply shows senior management are asleep at the wheel
Well I had another look at it over the weekend and sold the majority today. Unfortunately a loss but not major. - SG
A very wise move in hindsight since it didn't hold at 4.27 support line and is now likely to fall further, good for you.
QuoteWeirdly, there was a separate detailed release to the ASX (why two different releases?) that contained the following highly unusual statement; "In addition, it is possible that, given the matters to be considered at the Board meeting, the CEO of FBU will consider his position with FBU with this to be announced when his decision is made"
I have never seen that sort of thing before. It's as though the board are setting out to make his position untenable. Internal relations at a senior level in the company look to be in a state of utter turmoil. Heads need to roll.
QuoteCorporate New Zealand is agog at the drama unfolding at Fletcher Building, with one merger and acquisition specialist describing the company's statements to the NZ and Australian stock exchanges as "unprecedented". As well as the fact that the Australian securities exchange (ASX) published the whole disclosure while the NZ stock exchange (NZX) held some details back, the announcement before Wednesday's half-year earnings result that chief executive Ross Taylor is "considering his position" has stunned observers. "It's effectively a resignation. There's no coming back from that," said one close observer who declined to be named. The developments have also unleashed a chorus of public and private calls for resignations from the board and senior management at the country's largest construction company. 'Something more malign'? In its Tuesday morning note to clients, Craigs Investment Partners (CIP) described the differential disclosure as "weird" and the statement on Taylor as "highly unusual". "The release (including a potential CEO exit) suggests this may not be a borderline (8-12%) continuous disclosure issue but rather something more malign," Craigs said, citing a report in The Australian newspaper "now questioning the future of the CEO, CFO [Bevan McKenzie] and chair [Bruce Hassall]". Outspoken founder of KiwiSaver provider Simplicity, Sam Stubbs, said investors would be "very disappointed" if key board members, including Hassall, don't tender their resignations this week. "They've failed to deliver over the six years since most of them were appointed, so most of them, and most importantly, the chair, should resign. The buck stops there, not with the CEO," he said. Simplicity owns $23 million of Fletcher shares, where Taylor has been CEO since 2017 when he replaced Mark Adamson, whose tenure was marked by repeated downgrades and internal dissent. Hassall jumped into the chairmanship of the company in 2018, succeeding Ralph Norris, whose tenure included the company's high-rise construction fiasco, which resulted in losses of about $1 billion. Exit required Blackbull Research's Eden Bradfield saw Taylor's exit as required as he had presided over significant destruction of shareholder value. In a market where property values have doubled across the board, Fletcher had paid reduced dividends, faced lawsuits over bursting pipes in Australia and overseen cost blowouts that make a night out drinking whiskey with former prime minister Rob Muldoon seem tame, he said. "This company has lurched from mediocrity to mediocrity for a long time. Time for Taylor to go to greener pastures (I'm sure the golf course is calling) and time for management to rethink its strategy." Bradfield said the plasterboard shortage, which caused outrage, was foreseeable. "That preferential access was given out to [plasterboard customers] like VIP tickets to a Taylor Swift concert was a total failure of management. I would not invest in Fletchers or touch it with a ten-foot barge pole right now." However, he had some sympathy as some factors hadn't been in Fletcher's control. The local head of research for global proxy giant Institutional Shareholder Services (ISS), Vas Kolesnikoff, told BusinessDesk in December that no one had been held accountable for a string of performance issues at Fletcher. Out-sized executive pay ISS told clients, including shareholder NZ Super Fund, before Fletcher's annual general meeting in October that it was a material concern that Taylor's current fixed remuneration was approximately 63% higher than at similar-sized and peer companies. Taylor took home more than $5.4m in the last financial year. ISS said peers leading NZX-listed companies of similar size, including Air NZ, Ebos and Vector, earned about $1.44m on average and that Fletcher's remuneration disclosure was poor. The company did not disclose weightings and specific and quantified targets at "threshold", "target" and "stretch" for Taylor's short-term incentives, as recommended by the NZX code. "It becomes pretty objective, then, if [remuneration] is substantially over. Then my analysts will make a comment and say 'this has been their performance, their results are down this year, or they've been down the last two years'. Not too sure how any of this [pay increase] is justified," Kolesnikoff said. Aussie pipe problem remains Meanwhile, the Iplex pipe failure remains an issue for Fletcher, and industry knowledge on the issue is changing along with analyst's forecasts. Fletcher has retained a $10m to $15m provision for the pipes issue, while analysts at Jarden are saying it could cost the company $387.5m over five years, and CIP estimates a massive range of between $50m and $1.95b. New information from Western Australian homebuilder BGC has given more detail on which pipes are bursting, but questions remain on the overall damage. The briefing viewed by BusinessDesk said BGC's research of 2,660 pipe bursts in 1,358 homes said it assumed all the pipes at homes it attended were the same. "Fletchers had not corrected or indicated differently to us," the briefing said. However, BGC has since found pipes labelled PB 4267 are not bursting. It is theorising that those pipes were made from a different resin. The company said Iplex had been switching between the two resins, and it is not clear how much of the leaky resin is in the market. The product has been discontinued. Some analysts are forecasting that Fletcher will be forced to recall its pipes, but the investigation into the pipes by Australian regulators is ongoing. Fletcher Building shares remain in a trading halt on the NZX and ASX ahead of Wednesday morning's half-year profit results, where the company has indicated that it will disclose figures at variance with market consensus.
Yep, pretty damning commentary, Basil, and as the pundits say, there's no coming back for CEO Taylor now, given the strange ASX disclosure that he is "considering his position". Jump before you're pushed is the inference. If only it was that easy to get the Board to resign, as they are just as culpable as Taylor.
One thing is for sure though - there's one hell of a downgrade coming!
Just as well downgrades never come in three's eh LoungeLizard....oh hang on a minute, we had one the other day, another tomorrow and I'd wager at least another one, maybe even two more before the end of the financial year.
suspect as the market place digest tomorrow's horror show the wider NZX 50 will also take a hit
Watch Taylor get paid a fortune to be fired. Just like with Adamson. Useless Board.
Yeap, severance packing will be multi-millions.
The culture of entitlement in FBU that flows right from the top to the bottom will never change.
Completely uninvestable.
Jeez, they can't even get a trading halt to go smoothly. This NZX release is about 24 hours after ASX investors had the same info:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/426113/412467.pdf (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/426113/412467.pdf)
Popcorn for morning tea tomorrow.
anyone else want to take a guess at the size of the golden parachute.........my pick $6-7m
One thing you can be sure of, it will be far higher than what it should be which is $0.00
The whole thing is a huge cluster f***
Should be zero and clawing back previous year's incentive payments which the write downs indicate were wrongly awarded. Let's see if the Board have any backbone at all.
Quote from: Mos on Feb 13, 2024, 10:01 PMShould be zero and clawing back previous year's incentive payments which the write downs indicate were wrongly awarded. Let's see if the Board have any backbone at all.
No fault dismissal clause in his employment contract guaranteeing one years salary according to BusinessDesk
And no
https://www.nzx.com/announcements/426123
• Revenue of $4,248 million, down 1% from $4,284 million in HY23
• EBIT before significant items of $264 million, down 27% from $360 million in HY23
• EBIT margin of 6.2%, down from 8.4% in HY23
• Net Loss After Tax of $120 million (incl. $180 million flagged legacy provisions and $122 million non-cash write-down on Tradelink) compared to Net Profit After Tax of $92 million in HY23
• Underlying trading cash flows robust on good working capital management offset by legacy cash impact
https://www.nzx.com/announcements/426125
Auckland, 14 February 2024: Fletcher Building Ltd ("Fletcher Building" or "the Company") today announces that Group Chief Executive Officer (CEO) Ross Taylor has given notice to the Board of his retirement and that as part of a Board renewal review being undertaken, Chairman Bruce Hassall will step down from the Board at the Company's Annual Shareholders Meeting later this year.
$120m loss and that's without taking any extra provisioning for the controversial pipe issue in Western Australia. What a shocker. Huge cash outflows too. Board Chair and CEO leaving as they should. Both clearly bereft of any idea how to fix this horrible mess.
just read over the ann.....CEO retiring....no golden parachute?
bad financial result but not really bad....no interim divi but ok outlook.
Now decks have been cleared share price might go up today
Quote from: Basil on Feb 14, 2024, 09:54 AMhttps://www.nzx.com/announcements/426123
Board Chair and CEO leaving as they should
For this, I applaud them, whether they left of their own volition or were pushed.
Too many executives and board members are more concerned about their ongoing gravy train, rather than accepting accountability and stepping down - I'm looking at you Brent Robinson, and your siblings
A clean slate was needed, and has been delivered
Such a fall from grace for FBU. I remember trading at around the $9.50-$10.00 level a few years back
Decks cleared ? clean slate ? Really ?
I expect more provisioning to come on the NZICC and pipes issue and at least another downgrade based on trading conditions. Then there's the majority of the board left who are all but useless and other senior management paid like the Saudi Royal family who are serial under-performers.
Like I said yesterday, its completely uninvestable but if you must, then I posted my no growth valuation a little while back.
Board quite famous ....Chairs of big NZ companies ...even if power companies feature
And a few did Commerce at Auckland Uni ....and one seems to have been a big PWC man once
Yes, so one could conclude that the rot is a couple of levels below.
Or that the Board has been fed alot of crap information to base decisions on.
Quote from: Basil on Feb 14, 2024, 10:28 AMDecks cleared ? clean slate ? Really ?
I expect more provisioning to come on the NZICC and pipes issue and at least another downgrade based on trading conditions. Then there's the majority of the board left who are all but useless and other senior management paid like the Saudi Royal family who are serial under-performers.
Like I said yesterday, its completely uninvestable but if you must, then I posted my no growth valuation a little while back.
Yes, a clean slate, really
The correct actions have been taken. The new chairperson can sort out the board members and hold the new CEO to account. The new CEO can sort out senior management and other operational issues. Just like any well managed large business
What would you want? Heads on a pike? Public hanging? Removal of all board members? Removal of all senior management? A magic wand to undo the ICC fire? Demolish the new plasterboard factory? Or something else?
Pre-market looking very ugly. $3.65 and falling, from $4.16 close yesterday
What we want.
Half a billion dollars spent on a proper integrated IT system that can spit out meaningful information on a timely basis.
Having a bolt on dinosaur decentralised system leads to mis information and cashflow pressures when the bank account does not match forecast cashflows.
They use to just blame the weather when the cash didn't arrive.
Onwards and upwards from here.
Terrible result as expected, but the surprising part has been how little FBU acknowledges just how terrible they have performed as a business - not just in these more "difficult" economic times but right through an unprecedented housing boom.
And what utter nonsense from the Board, thanking CEO Taylor for leading "the turnaround of Fletcher Building which has seen the core businesses becoming more focused and profitable, with improved earnings, margins and returns." What profitable core businesses are they referring to, when overall they make a $120m loss, have massive cash outflows, huge provisions and probably won't be paying any dividends in the near term?
Fundamentally the Board and Management team have badly let down investors and it's clear that their so called reforms have come to nothing. They badly need an old school CEO and team that will conduct a line by line, root and branch analysis and clear-out.
At the moment, imo, Fletchers is completely un-investable, save for perhaps a few traders hoping for the inevitable dead cat bounce. Why some think that throwing more good money after bad is a good investment strategy is beyond me - there's clearly going to be more carnage to come. :o
I think BlackPeter is consulting/works forvthem
Numerous times I heard about no one can really predict the future but the market likes us to have a go ......and when we do try it's usually a pretty poor calculated guess
Quote from: Shareguy on Feb 09, 2024, 10:50 AMJust been speaking to my broker who said to me don't sell your FBU at this price and to wait. Have decided to take his advice and wait. No more next week I guess.
Fire your broker!
Quote from: LoungeLizard on Feb 14, 2024, 12:33 PMTerrible result as expected, but the surprising part has been how little FBU acknowledges just how terrible they have performed as a business - not just in these more "difficult" economic times but right through an unprecedented housing boom.
And what utter nonsense from the Board, thanking CEO Taylor for leading "the turnaround of Fletcher Building which has seen the core businesses becoming more focused and profitable, with improved earnings, margins and returns." What profitable core businesses are they referring to, when overall they make a $120m loss, have massive cash outflows, huge provisions and probably won't be paying any dividends in the near term?
Fundamentally the Board and Management team have badly let down investors and it's clear that their so called reforms have come to nothing. They badly need an old school CEO and team that will conduct a line by line, root and branch analysis and clear-out.
At the moment, imo, Fletchers is completely un-investable, save for perhaps a few traders hoping for the inevitable dead cat bounce. Why some think that throwing more good money after bad is a good investment strategy is beyond me - there's clearly going to be more carnage to come. :o
Management: we are not to blame and won't share your pain.
We deserve our many millions we have received, too bad we can't afford you the owners a small dividend for the time being.
Quote from: LoungeLizard on Feb 14, 2024, 12:33 PMTerrible result as expected, but the surprising part has been how little FBU acknowledges just how terrible they have performed as a business - not just in these more "difficult" economic times but right through an unprecedented housing boom.
And what utter nonsense from the Board, thanking CEO Taylor for leading "the turnaround of Fletcher Building which has seen the core businesses becoming more focused and profitable, with improved earnings, margins and returns." What profitable core businesses are they referring to, when overall they make a $120m loss, have massive cash outflows, huge provisions and probably won't be paying any dividends in the near term?
Fundamentally the Board and Management team have badly let down investors and it's clear that their so called reforms have come to nothing. They badly need an old school CEO and team that will conduct a line by line, root and branch analysis and clear-out.
At the moment, imo, Fletchers is completely un-investable, save for perhaps a few traders hoping for the inevitable dead cat bounce. Why some think that throwing more good money after bad is a good investment strategy is beyond me - there's clearly going to be more carnage to come. :o
Well said Lounge Lizard. I'd like to see more heads roll at a board level and a 50% pay cut, the company acknowledge its appalling performance and an expert external investigation of the weaknesses in FBU's internal controls and reporting systems. Maybe the CFO is pretty useless just like the CEO ?
One thing you can be sure of with FBU...the cockroaches will keep coming out of the woodwork and that's not going to stop just because the chair and CEO are retiring.
QuoteYes, a clean slate, really.The correct actions have been taken. The new chairperson can sort out the board members and hold the new CEO to account. The new CEO can sort out senior management and other operational issues. Just like any well managed large business
LOL, using the term well managed when talking about FBU...I'd got a good laugh out of that, thanks. If you like it, fill ya boots.
Quote from: winner (n) on Feb 14, 2024, 12:43 PMI think BlackPeter is consulting/works forvthem
...
There are clear problems with your thinking. I don't.
Quote from: Basil on Feb 14, 2024, 02:19 PMLOL, using the term well managed when talking about FBU...I'd got a good laugh out of that, thanks. If you like it, fill ya boots.
Did you even bother to read what I wrote? I'll answer that for you - Nope
As you will note, and you even highlighted it in your reply, it was patently clear that I said "Just like any well managed company"
Nowhere did I say / infer / imply that FBU was a well managed company. But that doesn't suit your narrative
Maybe you could take up a directorship or two, and show all those other "idiot and moron" directors exactly how its done? Or maybe you are CEO material, I hear that a position has just become available at a large NZ building company needing a turn-around
Or, perhaps the real-deal big daddy job, Managing Director? 😉
Just using that expression "well managed" in any way on the same page as discussing FBU was pretty comical. Maybe you should lighten up a bit. The tone of your last two posts suggests that to me. We're taking the mickey out of the FBU board and management because they fully deserve it.
Reality check for you, you're not going to change the culture of greed and entitlement that runs deep through this company just because the CEO and Chair resign. Two new people aren't going to wave magic wands, and everything will be alright.
Thanks for the career choice suggestions but I'm quite happy with the status quo.
Quote from: Basil on Feb 14, 2024, 02:19 PMWell said Lounge Lizard. I'd like to see more heads roll at a board level and a 50% pay cut, the company acknowledge its appalling performance and an expert external investigation of the weaknesses in FBU's internal controls and reporting systems. Maybe the CFO is pretty useless just like the CEO ?
One thing you can be sure of with FBU...the cockroaches will keep coming out of the woodwork and that's not going to stop just because the chair and CEO are retiring.
LOL, using the term well managed when talking about FBU...I'd got a good laugh out of that, thanks. If you like it, fill ya boots.
now now Mr beagle, changing a poor performing mask (CEO) and inadequate rudder (Chairman) of any ship can procure very meaningful improvements
Quote from: Basil on Feb 14, 2024, 06:16 PMJust using that expression "well managed" in any way on the same page as discussing FBU was pretty comical. Maybe you should lighten up a bit. The tone of your last two posts suggests that to me. We're taking the mickey out of the FBU board and management because they fully deserve it.
Reality check for you, you're not going to change the culture of greed and entitlement that runs deep through this company just because the CEO and Chair resign. Two new people aren't going to wave magic wands, and everything will be alright.
Thanks for the career choice suggestions but I'm quite happy with the status quo.
disagree
Quote from: snapiti on Feb 14, 2024, 06:19 PMnow now Mr beagle, changing a poor performing mask (CEO) and inadequate rudder (Chairman) of any ship can procure very meaningful improvements
Snapper me old mate, anything is possible BUT in my 40+ years of successful investing I have found wanting to change the culture of a company and actually doing it are two very, very different things. This is especially the case with large companies with multiple divisions.
Anyway...the market has spoken, down 55 cents to $3.61. Some will be looking for the dead cat bounce and good luck with that. I reckon there's more pain and anguish to come for beleaguered shareholders.
Quote from: entrep on Feb 14, 2024, 12:45 PMFire your broker!
No. I take the good with the bad. He has also made me a lot of money. Luckily I sold most before the latest shit show was announced. Still a loss though. And every loss hurts.
Gosh they can't even get the NTA right. typographical ....rubbish.
https://www.nzx.com/announcements/426195
As some of you have probably caught on I've had my doubts about Taylor being Fletchers saviour from very early days
First red flag was when I heard it was Kate Spargo, who was on UGL and Fletcher boards, tapped him on the shoulder and said go talk to Ralph Norris and he'll sort something out. So much for the global executive search eh
Kate didn't last much longer and left about the same time Norris did ...but damage done
Event analysis
Fletcher Building Earnings: Forecast Downgrade Due to Weak Residential Sector
We maintain our fair value estimate for no-moat Fletcher Building at NZD 6.00 per share. We modestly lift our fair value estimate for shares listed on the Australian Securities Exchange to AUD 5.70 based on the current New Zealand/Australia exchange rate. Fletcher reported first-half fiscal 2024 EBIT of NZD 264 million and downgraded full-year earnings guidance. Consequently, we cut our fiscal 2024 operating earnings forecast by one fifth to NZD 580 million, about the midpoint of management's updated guidance. The operating environment will continue to be challenging over the remainder of the fiscal year with a contraction in new house builds and renovations weighing on volumes and margins. However, we expect a gradual recovery in the residential sector from fiscal 2025 and our mid- to long-term forecasts are largely unchanged.
Fletcher has increased its borrowings over the half year. Leverage, or net debt/EBITDA, closed 1.8 times at the end of December 2023 from 1.2 times at June 2023 This is within the firm's target range of 1 times to 2 times, and within banking covenants. The board has declared no interim dividends. We do not expect any dividends in fiscal 2024, given the balance sheet is likely to remain stretched while the firm completes the New Zealand International Convention Centre. However, this is a one-off and we expect leverage to stay within the target range and improve from fiscal 2025 as the cycle improves. We forecast net debt/EBITDA averaging below 1 times from fiscal 2028 to 2033 and dividends to return from fiscal 2025.
MorningStar
Quote from: kiwi2007 on Feb 15, 2024, 04:15 PMEvent analysis
Fletcher Building Earnings: Forecast Downgrade Due to Weak Residential Sector
We maintain our fair value estimate for no-moat Fletcher Building at NZD 6.00 per share. We modestly lift our fair value estimate for shares listed on the Australian Securities Exchange to AUD 5.70 based on the current New Zealand/Australia exchange rate. Fletcher reported first-half fiscal 2024 EBIT of NZD 264 million and downgraded full-year earnings guidance. Consequently, we cut our fiscal 2024 operating earnings forecast by one fifth to NZD 580 million, about the midpoint of management's updated guidance. The operating environment will continue to be challenging over the remainder of the fiscal year with a contraction in new house builds and renovations weighing on volumes and margins. However, we expect a gradual recovery in the residential sector from fiscal 2025 and our mid- to long-term forecasts are largely unchanged.
Fletcher has increased its borrowings over the half year. Leverage, or net debt/EBITDA, closed 1.8 times at the end of December 2023 from 1.2 times at June 2023 This is within the firm's target range of 1 times to 2 times, and within banking covenants. The board has declared no interim dividends. We do not expect any dividends in fiscal 2024, given the balance sheet is likely to remain stretched while the firm completes the New Zealand International Convention Centre. However, this is a one-off and we expect leverage to stay within the target range and improve from fiscal 2025 as the cycle improves. We forecast net debt/EBITDA averaging below 1 times from fiscal 2028 to 2033 and dividends to return from fiscal 2025.
MorningStar
$6 per share? (currently trading at $3.50). Morningstar living up to its reputation as the most out-of-touch analysts in the business. And there's a lot of competition for that title..
Quote from: snapiti on Feb 14, 2024, 06:19 PMnow now Mr beagle, changing a poor performing mask (CEO) and inadequate rudder (Chairman) of any ship can procure very meaningful improvements
Beagle. Now that explains a few things. I have a clearer understanding now this old username from the other forum has been shared
Thanks
Quote from: LoungeLizard on Feb 15, 2024, 04:40 PM$6 per share? (currently trading at $3.50). Morningstar living up to its reputation as the most out-of-touch analysts in the business. And there's a lot of competition for that title..
Furrbar at $4.80, rating "outperform" is pretty comical too.
Common knowledge xafalcon. Market has spoken again and another 7% wiped off the price. Must be a screaming bargain at $3.35...back the truck up, what could possibly go wrong ;)
Quote from: Basil on Feb 15, 2024, 05:21 PMFurrbar at $4.80, rating "outperform" is pretty comical too.
Common knowledge xafalcon. Market has spoken again and another 7% wiped off the price. Must be a screaming bargain at $3.35...back the truck up, what could possibly go wrong ;)
broker ratings especially morning star are a joke....not at all surprised to see it sell down some more given it has very little to offer in the near term and no dividend.
New CEO and chair have a massive job to turn around the culture. Still sit on a few in my divi port folio but they will be shifted to the WTF portfolio....happy to say they will be in there on thier own
Closed at $3.35, down 30% in the last year alone. You may be right, Basil - SP could have a 2 in front of it before the market settles.
WTF portfolio love it lol...but if I'm ever in a situation where I am wondering WTF with regard to a stock I own, I just sell it.
Think you meant to say, down 30% year to date, i.e. in one and a half months. Lots of scope for further extraordinary item write-downs and sounds like in the call that business has been very soft year to date.
Quote from: Basil on Feb 15, 2024, 06:21 PMWTF portfolio love it lol...but if I'm ever in a situation where I am wondering WTF with regard to a stock I own, I just sell it.
Think you meant to say, down 30% year to date, i.e. in one and a half months. Lots of scope for further extraordinary item write-downs and sounds like in the call that business has been very soft year to date.
yep I am hearing you.....really in the scheme of things(don't hold that many) I am happy to hold this dog....just happy it is the first share to make it into the WTF portfolio for many years.
Quote from: Basil on Feb 15, 2024, 06:21 PMWTF portfolio love it lol...but if I'm ever in a situation where I am wondering WTF with regard to a stock I own, I just sell it.
Think you meant to say, down 30% year to date, i.e. in one and a half months. Lots of scope for further extraordinary item write-downs and sounds like in the call that business has been very soft year to date.
Yes, the drop in the last couple of months has been severe, but the SP was also $5 a calendar year ago, so I suppose that says that there has been no "recovery" (as the Board would have it) over that period, at least not for investors. In fact the SP was over $7 when Taylor started at the end of 2017, so if you had put your faith in him then, you would have lost 60% 0f your stake by now. :-X
FBU - a regular diet of one-off extraordinary items. No thank you. I mean why would you? Just why?
Had a quick look at the numbers this morning.
The debt level is abit of a concern. I say it's about fair value now and if the price goes higher it would probably due to sentiment. With construction theres always a lag factor and they need to pay down the debt.
The interview with Maddy was interesting. I know I have been critical of Fletchers in the past. But he made a couple of interesting points which I agreed on. They won the tender to build the convention centre a few years ago, of course the fire and covid happened. Different environment than and with construction, time is the enemy.
Regarding the convention centre provisons, no different to no builder in the right mind provides a fixed price contract for a reclad. You don't know the full extent of the damage/cost until you strip it to the core. You only know as you go along and obviously inflation compounds the issue.
Perhaps there is money to be made at this SP level. Who knows.
I enjoyed Maddy's frank interview style.
https://www.nzherald.co.nz/business/stock-takes-why-fletcher-building-has-lagged-the-market-for-over-a-decade/5AIQVLEA45H2PNHZ2XPXYWFBJ4/
Maybe you could give FBU the benefit of the doubt that they've been really unlucky with the NZICC and with the rebuild during Covid and my methodology of averaging the last 6 years earnings encapsulates too much of the recency with their problems.
I remain very staunch in my view this is a no growth highly cyclical business.
Perhaps an average of all inclusive (including all extraordinary items) earnings over the last 15 years and apply a no growth PE of 8 values FBU more fairly. Might have a look at that later today and see if there's any value here at all.
P.S. I did that and found average eps over the last 15 years inclusive of all extraordinary items is 27.71 cps. Applying said no growth PE of 8 to that gives fair value of $2.22. That's all I think its worth. I think my way of valuing it shifts through all the talk, crap and excuses and simply laser focuses on average earnings across several business cycles. I'd encourage anyone considering this to zoom out and look at the big picture. There's no growth here, never has been. The company was making nearly 50 cents eps more than a decade ago. I can't see it making that much any year soon.
Quote from: Basil on Feb 16, 2024, 10:33 AMI enjoyed Maddy's frank interview style.
https://www.nzherald.co.nz/business/stock-takes-why-fletcher-building-has-lagged-the-market-for-over-a-decade/5AIQVLEA45H2PNHZ2XPXYWFBJ4/
Maybe you could give FBU the benefit of the doubt that they've been really unlucky with the NZICC and with the rebuild during Covid and my methodology of averaging the last 6 years earnings encapsulates too much of the recency with their problems.
I remain very staunch in my view this is a no growth highly cyclical business.
Perhaps an average of all inclusive (including all extraordinary items) earnings over the last 15 years and apply a no growth PE of 8 values FBU more fairly. Might have a look at that later today and see if there's any value here at all.
P.S. I did that and found average eps over the last 15 years inclusive of all extraordinary items is 27.71 cps. Applying said no growth PE of 8 to that gives fair value of $2.22. That's all I think its worth. I think my way of valuing it shifts through all the talk, crap and excuses and simply laser focuses on average earnings across several business cycles. I'd encourage anyone considering this to zoom out and look at the big picture. There's no growth here, never has been. The company was making nearly 50 cents eps more than a decade ago. I can't see it making that much any year soon.
Maybe that's a bit pessimistic. Lets put it that way - if they don't change, they will continue with their downtrend.
I still see potential value in this company, but it would require a split into smaller entities (potentailly including a legacy entity designed to fail if need be), stop doing going forward the complicated stuff they are just too dumb to do and change the company culture from rewarding troughers to rewarding performance.
But yes, this might be a hard sell to the people in power - I guess its like with any other governance / government - why would the people who succeeded in the prevailing culture to swim closest to the trough want to change the culture?
Quote from: Basil on Feb 16, 2024, 10:33 AMI enjoyed Maddy's frank interview style.
https://www.nzherald.co.nz/business/stock-takes-why-fletcher-building-has-lagged-the-market-for-over-a-decade/5AIQVLEA45H2PNHZ2XPXYWFBJ4/
Maybe you could give FBU the benefit of the doubt that they've been really unlucky with the NZICC and with the rebuild during Covid and my methodology of averaging the last 6 years earnings encapsulates too much of the recency with their problems.
I remain very staunch in my view this is a no growth highly cyclical business.
Perhaps an average of all inclusive (including all extraordinary items) earnings over the last 15 years and apply a no growth PE of 8 values FBU more fairly. Might have a look at that later today and see if there's any value here at all.
P.S. I did that and found average eps over the last 15 years inclusive of all extraordinary items is 27.71 cps. Applying said no growth PE of 8 to that gives fair value of $2.22. That's all I think its worth. I think my way of valuing it shifts through all the talk, crap and excuses and simply laser focuses on average earnings across several business cycles. I'd encourage anyone considering this to zoom out and look at the big picture. There's no growth here, never has been. The company was making nearly 50 cents eps more than a decade ago. I can't see it making that much any year soon.
I was abit generous in my fair value comment. Bonds are paying about 8%. I don't think we are at the bottom of the construction cycle- who knows 6 to 12 months out?. Never considered to be a growth company, certainly cyclical in nature. There will be some people who can get the timing right and makes some money, you only have to look at RBD. I think sentiment and rates expectation pushed the SP in the last few months- now it's falling back down. Not my approach, but I am sure there other market participants who approach it differently and make something out of it.
Basil ...this chart might help
EPS trending down lol
But if you took say average EPS of say 55 cents then your PE of 8 gives $4.40
But historically trades at higher PE ...blue chip, large component NZX and of course prospects are bright. Broker says construction market at an inflection point so why not a PE of 12 which is $6.60
Seems a BUY BUY BUY today
IMG_5643.png
Quote from: winner (n) on Feb 16, 2024, 11:13 AMBasil ...this chart might help
EPS trending down lol
But if you took say average EPS of say 55 cents then your PE of 8 gives $4.40
But historically trades at higher PE ...blue chip, large component NZX and of course prospects are bright. Broker says construction market at an inflection point so why not a PE of 12 which is $6.60
Seems a BUY BUY BUY today
IMG_5643.png
Interesting chart - actually, one could see in it an inverted head and shoulders pattern (which would be good for holders :) - all up from here?
One thing re FBU performance over the years is that the top line is rather flat
Was $9billion in 2016 and has been up around $8.0 billion to $8.5 billion from 2017
Some changes in businesses but hardly inspiring. Probably Ross saw top line growth as a problem and that's why he focused so much on 'margin improvement'
often the best time to buy a company is when all is negative and sell sentiment is high(not companies like SML who are in complete financial sh#t)
Companies like FBU who have a very broad business model but have been poorly run.
I actually think they are worth backing, not at $3.50 at the moment though
That EPS trend last few years .......didn't they have a couple of share buy backs to raise EPS so big bonuses could be paid
But about the time Taylor arrived they had a $750m (from memory) cap raise to keep the bankers happy
Quote from: snapiti on Feb 16, 2024, 12:48 PMoften the best time to buy a company is when all is negative and sell sentiment is high(not companies like SML who are in complete financial sh#t)
Companies like FBU who have a very broad business model but have been poorly run.
I actually think they are worth backing, not at $3.50 at the moment though
I guess this is the eternal dilemma of a bottom picker ... do I pick now (and it could be still cheaper) or do I pick later (and missed the lowest bit).
But yes ... currently the down momentum looks quite massive, but hard to say where it will stop, and whether this is the capitulation or just one of the earlier down waves.
But no doubt - there is some value in the company (and despite beagles PE's I'd say its higher than todays SP). And yes, I'd see their value based on their historic PE's around the $6 mark (ouch, I can't possibly agree with Morningstar, can I). However - it will probably take for the construction cycle to recover in earnest to realise this value (which will be depending on which analyst you believe late 2025 or maybe 2026) ... and yes, they better go with a board prepared to make the hard decisionsand able to avoid new clusterf*cks.
Just wondering whether a takeover for private equity might be an option? Takeover for 2 Billion *|(roughly the current market cap), recover this money and some by selling some of the jewels (like building products, concrete and the healthy Ossie stuff) load up the rest with debt and IPO it.
Anyway - the lower we talk it, the cheaper it will be for anybody who wants to try this trick. Lets do it!
gave up trying to pick the bottom years ago, I believe one must shut out all the noise and focus on a price that one is comfortable taking out any given investment and show conviction to that purchase.
That way, if your read is right, it does not matter if it goes lower than your purchase as eventually when the sell sentiment abates you should eventually end in the money.
Also be prepared to back yourself if you have real conviction on a stock and the market sells down after you purchase and treat it as another buying opportunity.
I think to many investors let their emotions control their buying and selling decesions.....one needs to get control of fear and greed to become a good investor.
Thanks Winner but I get average eps incl all extraordinary items of only 27.7 cps for the last 15 years.
Even if you are really kind and back out the billion-dollar loss on the NZICC and assume that really is a one off that will never repeat, and by extension they'll never have to take a series of write-downs of that magnitude again, that lifts 15 average eps including other extraordinary write-downs to 35.7 cps. Put a PE of 8 on that and I get $2.86.
Sorry mate, I know you like it here, but I'm happy to let the numbers do the talking ignore Ross Taylor prattle about how it's all going to be wonderful from CY25 onwards and how there's so much potential in the business blah, blah, blah.
Quote from: snapiti on Feb 16, 2024, 02:40 PMI believe one must shut out all the noise and focus on a price that one is comfortable taking out any given investment and show conviction to that purchase.
Well said Snapper. I'd be happy to take a small position at $2.50 which I think would reflect the real worth of the business with all its risks going forward. Ask me if I care if it doesn't get that low. 😉
Quote from: Basil on Feb 16, 2024, 02:43 PMThanks Winner but I get average eps incl all extraordinary items of only 27.7 cps for the last 15 years.
Even if you are really kind and back out the billion-dollar loss on the NZICC and assume that really is a one off that will never repeat, and by extension they'll never have to take a series of write-downs of that magnitude again, that lifts 15 average eps including other extraordinary write-downs to 35.7 cps. Put a PE of 8 on that and I get $2.86.
Sorry mate, I know you like it here, but I'm happy to let the numbers do the talking ignore Ross Taylor prattle about how it's all going to be wonderful from CY25 onwards and how there's so much potential in the business blah, blah, blah.Well said Snapper. I'd be happy to take a small position at $2.50 which I think would reflect the real worth of the business with all its risks going forward. Ask me if I care if it doesn't get that low. 😉
Interesting number....I will climb into it as soon as it hits $2.90 provided their is no material change in the meantime
I thought it may be worth sharing the two most recent blog posts from NZ Shareholders Association (published on February 13th and 15th respectively - ie, before and after the announcement made by the company on Feb 14th). We're continuing to state we believe the changes announced during the week should be the beginning of change, not the end.
Feb 13th: https://www.nzshareholders.co.nz/scrip-article/its-just-a-flesh-wound/
Feb 15th: Whttps://www.nzshareholders.co.nz/scrip-article/a-decade-of-disaster-for-shareholders/
Quote from: Oliver Mander on Feb 18, 2024, 10:14 AMI thought it may be worth sharing the two most recent blog posts from NZ Shareholders Association (published on February 13th and 15th respectively - ie, before and after the announcement made by the company on Feb 14th). We're continuing to state we believe the changes announced during the week should be the beginning of change, not the end.
Feb 13th: https://www.nzshareholders.co.nz/scrip-article/its-just-a-flesh-wound/
Feb 15th: Whttps://www.nzshareholders.co.nz/scrip-article/a-decade-of-disaster-for-shareholders/
Thanks for posting Oliver. Can't open Feb15 article. Has W before https
https://www.stuff.co.nz/business/350181308/insiders-view-what-went-wrong-fletcher
interesting article which may be a short Treatise for why central control for governments can also destroy creative solutions often required for local problems...
https://www.nzshareholders.co.nz/scrip-article/a-decade-of-disaster-for-shareholders/
Took the W off for ya.
CFO says company committed to keeping its stable rating. How will that be achieved I wonder without a capital raise or selling assets.
https://www.nzx.com/announcements/426362
Quote from: Shareguy on Feb 19, 2024, 08:18 PMCFO says company committed to keeping its stable rating. How will that be achieved I wonder without a capital raise or selling assets.
https://www.nzx.com/announcements/426362
I think they're selling the Aussie plumbing business?
Sorry double post.
very interesting price movement today!!!!!!! pump and dump or leaky ship?
Quote from: snapiti on Feb 22, 2024, 06:00 PMvery interesting price movement today!!!!!!! pump and dump or leaky ship?
Maybe with takeover activity around CSL and BLD is fuelling speculation there might be interest in FBU
Better check in with AFR on a regular basis
But you'd have to say the price drop after the announcements was a bit over reactive
yes it was but that is not unusual as fear and greed are a big driver of SP....emotional investors create many opportunities
interesting the chair now gone with immediate effect, none of the usual thanks for a great job BS either, decided to sell my modest holdings today
Wait for $2.50 and maybe try again, all it's really worth in my opinion.
Need this sort of thing at the WHS too in my opinion.
QuoteCEO Transition
As part of the previously announced CEO renewal process, Fletcher Building Limited ("the Company"), today announced that the Board has appointed Nick Traber as Acting CEO of the Company, replacing Mr Ross Taylor, effective from 29 March 2024 for an interim period until a permanent CEO is appointed.
Mr Traber has been Chief Executive of the Company's high performing Concrete division since January 2021. During his tenure he has improved the operational performance of the division, including lifting its performance in health & safety, customer satisfaction, sustainability, and innovation along with a strong and improved financial performance. Prior to joining the Company, Mr Traber held CEO roles within leading concrete and building materials company, Holcim, in Europe and South America.
The Board is progressing a robust CEO search process which includes Mr Traber as an internal candidate, as well as external candidates. The process for the appointment of a permanent CEO will conclude following appointment of the new Company Chair.
To ensure an orderly transition, Mr Taylor will remain available to support Mr Traber and the business as required until 23 August 2024.
Mr Taylor commented that he is pleased to see Mr Traber appointed as Acting CEO: "Mr Traber has participated in a robust internal succession process and has an impressive track record of strong performance and effective leadership." Mr Taylor looks forward to being available to support Mr Traber in the coming months.
The Board appreciates the contribution Mr Taylor has made in the role and his availability to support Mr Traber over the next few months as required.
Mr Thornton Williams will be appointed acting CE of the Concrete division while Mr Traber is acting in the CEO role. Mr Williams is currently CFO of the Concrete division.
Board Renewal
As also previously announced, the Board of Fletcher Building Limited has committed to a Board renewal process to identify replacement directors and the appointment of a new Chair.
The Board is working with Johnson Partners to assist with this process, and discussions are continuing with potential external candidates. The renewal process will bring new skills and perspectives to the Board, to assist with the options available for the election of a new Chair. The Board is committed to finalising the Board renewal process as soon as possible.
To facilitate the process of Board renewal, Mr Doug McKay has informed the Board that he will step down with effect from 30 June 2024. Additionally, Mr Rob McDonald has advised the Board that he will not stand for re-election at the next annual shareholders' meeting in October and will retire from the Board at that time.
An orderly transition of their Board and Committee responsibilities will occur as the Board supports management in the financial year end processes and in other key areas.
The Board wishes to thank Mr McKay and Mr McDonald for their very significant contributions to the Board over the past five years.
bloody good clean out in the last couple of month.......warrented IMO
Quote from: snapiti on Mar 25, 2024, 11:29 AMbloody good clean out in the last couple of month.......warrented IMO
I agree that it looks like they identified appropriate run down brooms to replace.
Just hope the new brooms they pick as substitute are really cleaning better.
Lets not forget - Ross Taylor was as well once the new broom to clean out the Augean stable which FBU used to resemble. And just look what a job he did :o !?
Quote from: BlackPeter on Mar 25, 2024, 01:51 PMI agree that it looks like they identified appropriate run down brooms to replace.
Just hope the new brooms they pick as substitute are really cleaning better.
Lets not forget - Ross Taylor was as well once the new broom to clean out the Augean stable which FBU used to resemble. And just look what a job he did :o !?
Good point BP
Quote from: BlackPeter on Mar 25, 2024, 01:51 PMI agree that it looks like they identified appropriate run down brooms to replace.
Just hope the new brooms they pick as substitute are really cleaning better.
Lets not forget - Ross Taylor was as well once the new broom to clean out the Augean stable which FBU used to resemble. And just look what a job he did :o !?
But many/most thought the world of him. I got chastised many times for saying things against him
First red flag was when I heard a FBU/UGL Director shoulder tapped him and suggested he have a chat with Norris ...some recruitment process eh
Market update ....
not many green shoots...
https://www.nzx.com/announcements/430952
Quote from: Waltzing on May 13, 2024, 08:37 AMMarket update ....
not many green shoots...
https://www.nzx.com/announcements/430952
The thing with FBU is - if things are great, they are doing tough. If things are tough, they are doing tough as well.
Reliable indicator, but as economic indicator not more useful than a broken clock would be to give you the time.
Quote from: BlackPeter on May 13, 2024, 09:17 AMThe thing with FBU is - if things are great, they are doing tough. If things are tough, they are doing tough as well.
Reliable indicator, but as economic indicator not more useful than a broken clock would be to give you the time.
Interesting to compare Fletcher Building with Heidelberg Materials (HEI). Latter are listed on the DAX and work in the same industry. Started with Cement, but supplying these days all sorts of building materials. Sure - HEI is a bit larger (well - 5 times the revenue) and active in Europe, Africa and Asia.
While FBU seems to dig a deeper and deeper hole for itself - and since 2022 in a continuous downtrend, HEI is just creaming it and since Sept 2022 on a strong uptrend with SP nearly tripling.
Hey, there is plenty of money in building materials in the current economic climate, just wondering why FBU despite its near monopoly position in NZ is too dumb to collect it.
Probably too fat and lazy. Some companies deserve to be culled.
FBU-trend.JPG
HEI-trend.JPG
Discl:
hold HEI.DE :)
... but unfortunately as well some FBU.NZ :'( ;
Quote from: BlackPeter on May 13, 2024, 09:17 AMThe thing with FBU is - if things are great, they are doing tough. If things are tough, they are doing tough as well.
Reliable indicator, but as economic indicator not more useful than a broken clock would be to give you the time.
Good and valid points well made.
FBU has been shambolically managed for decades, save for the Ralph Waters period. One CEO after another using the reliable earnings and cashflow from their oligopolistic NZ operations to make ill-conceived overseas acquisitions and expansions to stoke their egos at huge costs to shareholders.
Hope the next CEO is another Ralph Waters. FBU desperately needs one.
Quote from: Teitei on May 13, 2024, 12:20 PMGood and valid points well made.
FBU has been shambolically managed for decades, save for the Ralph Waters period. One CEO after another using the reliable earnings and cashflow from their oligopolistic NZ operations to make ill-conceived overseas acquisitions and expansions to stoke their egos at huge costs to shareholders.
Hope the next CEO is another Ralph Waters. FBU desperately needs one.
Nailed it with that comment. I have never held and very unlikely to in the future.
The culture of entitlement starts at the top and permeates throughout the company.
SmartShares Comment:
"...A near-term equity raise is possible, and we need to assess the likelihood of it occurring and its materiality should it eventuate. A sale of the Australian Tradelink plumbing business looks increasingly important to assist in deleveraging..."
Craig's don't have much that's positive to say. Yes possible CR coming and further downside risk a real possibility. Even at $3 I don't see it as good buying. Needs to be taken over or split up I reckon.
Our Target Price, now based fully on CIPe 12-month blended forward EPS of 26cps (prev. 30cps) and FBU's historical average PE of 12.8x, is $3.35 (prev. $3.86). FBU is currently trading at 12.1x our expected EPS of c.26cps. Our adjusted approach (prev. 50/50 DCF/PE multiple, $4.39) accounts for what we think are near-bottom of the cycle earnings. We retain our Neutral recommendation and highlight unresolved uncertainty relating to FBU's legacy projects & Iplex iss
Quote from: Waltzing on May 13, 2024, 08:37 AMMarket update ....
not many green shoots...
https://www.nzx.com/announcements/430952
Which downgrade number is this.....number 1 or 2?
When there is a CR at $2, I might try and pick some up on market around there.
Quote from: Ferg on May 14, 2024, 09:27 PMWhich downgrade number is this.....number 1 or 2?
Good question, I am lost because there are so many so called "one-off" extraordinary items provisioning does that could as a general downgrade or not ?
Not all gloomy if they can chug along without a raise. They have spent maybe ~$700 or ~$800m in growth capex over the last few years for things such as the new Tauranga Gib facility that should probably earn something.
Also across the ditch competition CSR getting taken out at 16x ebit. Yes, less debt, more stable earnings etc but who knows? https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02777351-2A1507472
The Australian reported yesterday that FBU is understood to have launched the sale process for its plumbing supplies business Tradelink, with detailed documents about the business now with prospective suitors. It is understood information memorandums have been sent out by the group hired to sell the business.
not unexpected to see a downgrade, created a nice buying opportunity me thinks, bought FBU today based on change of CEO and board members....
US Platinum runs ruler over Fletcher Building, taps Gresham. Will Platenum buy some or all or nothing say AFR.
A shame if we loose another NZX company. However this dog has had its day
I think FBU has made itself a perfect takeover target for those who want to purchase what should be a really great company for dirt cheap.
They have been run into the ground and I believe some entity will purchase the company and strengthen the business then sell off individual business components making an absolute fortune by doing so.
Quote from: snapiti on May 29, 2024, 03:33 PMI think FBU has made itself a perfect takeover target for those who want to purchase what should be a really great company for dirt cheap.
They have been run into the ground and I believe some entity will purchase the company and strengthen the business then sell off individual business components making an absolute fortune by doing so.
Agree, takeover by an entity that knows how to run these businesses and put shareholders out of their long term misery. Truly atrocious Board and Management capability and performance over the last decade paid exorbitantly high amounts to destroy value.
Quote from: Mos on May 29, 2024, 08:55 PMAgree, takeover by an entity that knows how to run these businesses and put shareholders out of their long term misery. Truly atrocious Board and Management capability and performance over the last decade paid exorbitantly high amounts to destroy value.
Yep a perfect example of exactly what you said....quite laughable where the company has ended up
Fletchers rating downgrade........higher interest costs likely to follow.
https://www.nzx.com/announcements/432341
As i postulated in early feb FBU is going to be a 2.xx stock for a while until something in management changes.
FBU Board makes a hash of sacking itself and appointing a new Chair. The entire Board should be too embarrassed to take any Directors fees.
https://www.nzherald.co.nz/business/mark-cairns-pulls-out-of-farcical-process-for-fletcher-building-chairperson/7X3VBPOJXJCXJP4XFSEJ4QC5YY/
Fiddling while Rome is burning is the accusation. Shares at ~ 20-year lows and FBU corporate bond yields 9%+ on the secondary market suggests share and bondholders are starting to fret a fair bit. My thoughts. The wood rot runs right through this company from the directors to the C Suite and well down the organisational structure. I wouldn't touch the shares or corporate bonds with a 40 foot barge pole.
BusinessDesk snippet 🤭
The Freightways chair said that despite widespread shareholder support, after three months of waiting, he was no longer a candidate to become the embattled construction giant's new chair, writing to executive recruitment consultant Johnson Partners to formally withdraw on Monday. "Rome continues to burn while the shareholders and employees of Fletcher Building await the papal smoke from the remaining board members," he said. "It is unclear what process is actually being run, yet the company is in relative crisis. I'm focused on various other interests in front of me."
Yes, would be good to see this company broken up into streamlined operating units and the overpaid head office value destroying overhead eliminated.
Quote from: Crackity on Jul 10, 2024, 09:09 PMBusinessDesk snippet 🤭
The Freightways chair said that despite widespread shareholder support, after three months of waiting, he was no longer a candidate to become the embattled construction giant's new chair, writing to executive recruitment consultant Johnson Partners to formally withdraw on Monday. "Rome continues to burn while the shareholders and employees of Fletcher Building await the papal smoke from the remaining board members," he said. "It is unclear what process is actually being run, yet the company is in relative crisis. I'm focused on various other interests in front of me."
It's further proof of incompetence, which is not surprising given the history or is it M&A well advanced. I go with incompetence.
Quote from: Shareguy on Jul 11, 2024, 06:49 AMIt's further proof of incompetence, which is not surprising given the history or is it M&A well advanced. I go with incompetence.
Fletcher at an operating level is in disarray - no co-ordination from head office or the board, one operating division not talking to another, and staff getting desperate as redundancies loom due to lack of work.
I could give an excellent example of that happening but that could reveal my contact so will just write that it is alarming that a company can be so directionless and stuck in the mire.
Something better happen soon as FBU is too important a company to the NZ building industry to drift like this.
Quote from: Teitei on Jul 11, 2024, 07:51 AMFletcher at an operating level is in disarray - no co-ordination from head office or the board, one operating division not talking to another, and staff getting desperate as redundancies loom due to lack of work.
I could give an excellent example of that happening but that could reveal my contact so will just write that it is alarming that a company can be so directionless and stuck in the mire.
Something better happen soon as FBU is too important a company to the NZ building industry to drift like this.
Too big to fail? Lets hope its no Titanic ...
huge red flags here, Oliver Mander right on the money and must listen to investors
https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2018946191/mark-cairns-pulls-out-of-farcical-process-for-fletcher-building-chair
board obviously looking for replacement that will align with their thinking, remind me again what that has done to the SP
As Oliver alludes to, 3 months in and the board finding it hard to find anyone of quality that will go along with their way of thinking
Just how bad are the 2nd 1/2 numbers gonna be, IMO current price of $3.15 will look expensive in 5 weeks time
https://www.nzherald.co.nz/business/fletcher-building-sells-its-tradelink-for-a170m-a10m-deferred-for-about-two-years/VYKXJX2RXNDAPEVL6SQFPLAFUQ/
Fletcher Building has sold Australian plumbing supplies and distribution business Tradelink for A$170 million (NZ$186m) and says it will use that to repay debt.
Fletcher will get A$160m cash payable on the settlement at the end of next month.
Fletcher will use the money to repay debt.
"The sale will enable us to concentrate our efforts on the performance and growth of Fletcher Building's core businesses."
Fletcher's annual result is due out next week.
"Loved" this bit
Quote"The sale will enable us to concentrate our efforts on the performance and growth of Fletcher Building's core businesses."
Growth, lol. FBU has been a pure cyclical business for decades. There's no growth here and there never has been any.
I didn't even bother asking Matt Peek at Kingfish if FBU was on their radar as I know the answer would be no from previous comments at prior year ASM's.
True to form with Fletchers there will be best part of $100m abnormals related to this deal
Non cash so all OK
When is an abnormal item just run of the mill everyday normal ? A. When Fletchers is involved lol
So they sold it for A$170m. Which will probably turn out to be A$160m. Less A$10m transaction costs and Less A$20M separation costs. Less impairment of A$32m Less NZ$54M in "derecognition of the Foreign Currency"
These guys are on fire and the directors no doubt will end up in the "business hall of fame."
It begs the question, how many other FB operations are over inflated on the books.
Then there's Iplex and the leaks...............
Quote from: Shareguy on Aug 12, 2024, 11:35 AMSo they sold it for A$170m. Which will probably turn out to be A$160m. Less A$10m transaction costs and Less A$20M separation costs. Less impairment of A$32m Less NZ$54M in "derecognition of the Foreign Currency"
These guys are on fire and the directors no doubt will end up in the "business hall of fame."
It begs the question, how many other FB operations are over inflated on the books.
Then there's Iplex and the leaks...............
Feb 2024 it was written down in their accounts - what a mess
Fletcher Building CEO Ross Taylor said one of the factors behind the loss was Tradelink, with "disappointing results" from the subsidiary leading Fletcher to write down the value of the plumbing supplier by NZ$122 million (A$115 million) and put the business up for sale.
Quote from: Crackity on Aug 12, 2024, 01:00 PMFeb 2024 it was written down in their accounts - what a mess
Fletcher Building CEO Ross Taylor said one of the factors behind the loss was Tradelink, with "disappointing results" from the subsidiary leading Fletcher to write down the value of the plumbing supplier by NZ$122 million (A$115 million) and put the business up for sale.
So at end of day it was a 50% off sale
Quote from: winner (n) on Aug 12, 2024, 02:00 PMSo at end of day it was a 50% off sale
The usual FBU saga from way back to Hugh Fletcher days - NZ makes the money and the CEOs & Boards squander the money on ill-fated overseas acquisitions.
Anyone able to think of one single overseas acquisition which has worked for FBU?
Quote from: Teitei on Aug 12, 2024, 03:33 PMThe usual FBU saga from way back to Hugh Fletcher days - NZ makes the money and the CEOs & Boards squander the money on ill-fated overseas acquisitions.
Anyone able to think of one single overseas acquisition which has worked for FBU?
https://www.youtube.com/watch?v=PlntBAK8VA8
Quote from: Shareguy on Aug 12, 2024, 11:35 AMThese guys are on fire and the directors no doubt will end up in the "business hall of fame."
Vhen I skim read zhis I read
"These guys are on fire and the directors no doubt will end up in the "business hall of flame."
I thought NZ does not have a "business hall of flame". Zhen I vondered vhy not? Zhere seem to be plenty of good candidates!
RB
Since they achieved an 'attractive outcome' then I'm guessing extra bonuses all around.
I've been away from the Office for a number of years. Has 'attractive outcomes' replaced 'takeaways' in meetings.
I've organized quite a few friendly meetings of investors over the years at the Viaduct and have never once met a single investor who could or has even tried to make a case for holding FBU. Almost all seem to have an opinion that management and the directors are useless.
Maybe it's only institutions that waste their money investing with these Muppets?
New CFO hire a gain for FBU and a loss for SUM??
https://www.nzx.com/announcements/436093
Quote from: Left Field on Aug 14, 2024, 09:22 AMNew CFO hire a gain for FBU and a loss for SUM??
https://www.nzx.com/announcements/436093
Going back from whence he came from .....maybe grass is greener than a few years ago
Probably just working on the basis that the only way is up!!
But then again it is Fletchers..... ::)
Quote from: Basil on Aug 13, 2024, 09:24 AMI've organized quite a few friendly meetings of investors over the years at the Viaduct and have never once met a single investor who could or has even tried to make a case for holding FBU. Almost all seem to have an opinion that management and the directors are useless.
Maybe it's only institutions that waste their money investing with these Muppets?
Can't possibly comment on your meetings and agree that FBU has an amazing history to screw things up if they can. Terrible company culture and a succession of quite inept boards and big mouthed but otherwise rather hapless CEO's. Having said that ... they used to be historically an amazing traders stock (you know - buy low and sell high :) ), and they are currently again quite low. But yes, still plenty of risks around, i.e. could go lower.
As well - they do have a handful of quite profitable elements (like Placemakers and various companies producing building materials) - so, the sum of the elements might be worth much more than the complete company is, which well might trigger a takeover at any time.
I would not write them off as an opportunity to make money ... and as usual, people waiting for the bell to ring before they go to table might arrive late.
Somebody stole 5 years worth of data from the long term trend below, but I guess the message is still clear: It is possible to make money with FBU if you watch the trend .. and it might well turn at the moment.
FBU longterm - Copy.JPG
... well, this was fast :)
At time of posting my last post FBU was at 3.22 and struggling.
Not even 5 hours later its at 3.33, rising and all in the green :);
Told you - there are ways to make money with FBU :) ;
Only the sky is the limit (well, take this with a grain of salt, but I think their price currently does not reflect the opportunities the company could seize);
Anyone else notice the change in rhetoric from FLetchers over the pipe issue, originally defiant saying it is all due to poor installation nothing to do with there product, they now saying they are engaged in constructive negotiations and look forward to an agreement
The smarts on here will know how profound a change in rhetoric can turn out to be
The Pipe issue is just going to be a large one-off extraordinary item. Just as well we know such large, extraordinary items are extremely rare with Fletchers eh Snapper ;)
Quote from: Basil on Aug 21, 2024, 01:20 PMThe Pipe issue is just going to be a large one-off extraordinary item. Just as well we know such large, extraordinary items are extremely rare with Fletchers eh Snapper ;)
F24 saw solid growth in significant items .....up from $301m in F23 to $333m in F24
Takes significant items since 2009 to $2,548 billion
I'll up date table for a laugh one day
And F24 EBIT before significant items of $509m not that good compared to recents years
IMG_5894.jpeg
Quote from: snapiti on Aug 21, 2024, 12:31 PMAnyone else notice the change in rhetoric from FLetchers over the pipe issue, originally defiant saying it is all due to poor installation nothing to do with there product, they now saying they are engaged in constructive negotiations and look forward to an agreement
The smarts on here will know how profound a change in rhetoric can turn out to be
Yes. I expect 2025 to be a shocker as well. New ceo is going to want all the gremlins sorted.
Quote from: winner (n) on Aug 21, 2024, 02:33 PMF24 saw solid growth in significant items .....up from $301m in F23 to $333m in F24
Takes significant items since 2009 to $2,548 billion
I'll up date table for a laugh one day
And F24 EBIT before significant items of $509m not that good compared to recents years
IMG_5894.jpeg
Great table Winner. Very sad.
Quote from: winner (n) on Aug 21, 2024, 02:33 PMF24 saw solid growth in significant items .....up from $301m in F23 to $333m in F24
Takes significant items since 2009 to $2,548 billion
I'll up date table for a laugh one day
And F24 EBIT before significant items of $509m not that good compared to recents years
IMG_5894.jpeg
sadly I think the pipes issue alone it going to add to the list.
Quite distasteful the contempt they treat SHers with.
12 months ago they were adamant the pipe issues was not the product in anyway, they even got their own report done and provided Shers with many pretty pictures of poorly installed pipe. At the time they were adamant it was the installers fault.
Why would they now be engaged in constructive negotiating and looking forward to an agreement????????
Sounds to me like the indemnity insurers may now be involved.
Quote from: winner (n) on Aug 21, 2024, 02:33 PMF24 saw solid growth in significant items .....up from $301m in F23 to $333m in F24
Takes significant items since 2009 to $2,548 billion
I'll up date table for a laugh one day
And F24 EBIT before significant items of $509m not that good compared to recents years
Great table winner. Thanks for sharing.
Taking a 'helicopter view' - FBU have had $2.2b of 'extraordinary items' on EBIT of $8.3b over 15 years. That is a long enough time slice to confirm a trend. So fully 26% of EBIT will be consumed by supposed one off items. Another way to look at this is the FBU share price deserves a 26% discount when looking at various profitability and pricing measures.
no wonder they where looking forward to an "agreement" being reached
https://www.nzx.com/announcements/436687
Gosh it just keeps coming. FB said before these announcements that a capital raise likely.
the bigger issue is BGC are just a group of home builders, much like GJ Gardner are in NZ.
The pipe issue is much broader than one home build company so expect more to jump on board if FBU lose.
I have heard this could be a $200m issue.......not sure if that is accurate.
Hopefully it does not end up like the dux quest pipe issue we had in NZ but it is sounding very similar.
FBU layers going to be very very busy including the latest commerce commission issue.
Really has gone from a mutt with fleas to a mutt with mange
Hard to believe that there are any brokers, institutional investors or retail investors that have a shred of faith left in FBU after a decade of serial disasters - mostly self inflicted.
Quote from: Shareguy on Aug 23, 2024, 09:36 AMGosh it just keeps coming. FB said before these announcements that a capital raise likely.
There's always more than one cockroach in the kitchen. Some companies have a real infestation and a culture that will never allow proper extermination of them. FBU is one of those companies. The level of greed and entitlement that permeates the board and senior management when their financial performance over the years has been so poor, is truly breathtaking. Highest paid board and CEO in the country and for what?
Quote from: Basil on Aug 23, 2024, 04:40 PMThere's always more than one cockroach in the kitchen. Some companies have a real infestation and a culture that will never allow proper extermination of them. FBU is one of those companies. The level of greed and entitlement that permeates the board and senior management when their financial performance over the years has been so poor, is truly breathtaking. Highest paid board and CEO in the country and for what?
In the spirit of being real and taking ownership I move that Fletcher Building changes its moniker to something along the lines of clusterf**k. Then a break up of the assets into streamlined focused businesses or wave the white flag and solicit takeover offers.
Quote from: Mos on Aug 23, 2024, 05:46 PMIn the spirit of being real and taking ownership I move that Fletcher Building changes its moniker to something along the lines of clusterf**k. Then a break up of the assets into streamlined focused businesses or wave the white flag and solicit takeover offers.
All done and dusted way back in 2000.
Fletcher today is but a dim reflection of what it once was - a conglomerate in finance, energy, real estate, industry, pulp, forestry and of course, building & construction.
Nothing to stop anybody making a takeover offer but who in their right mind would until all the contingent liabilities (like Iplex and Commerce Commission action) are surfaced and settled? The non-stop abnormals amounting each time to several hundreds of millions of dollars are indicative of more underlying issues waiting to surface.
Agree Teitei, can't see anyone brave enough for a takeover until these issues are sorted. If Forbar are right and a cap raise is coming it will put further pressure on the share price.
Back in October 23 Jarden analyst Grant Swanepoel said about the BGC forecast loss from the iplex pipes. "Worst case scenario would be $1.3 billion"
Brokers Macquarie and Morgan Stanley cut their price targets on the stock by 5% and 6% to $2.43 and $2.90 per share respectively.
Don't think we have seen the bottom. Best of luck to any holders left.
Quote from: Shareguy on Aug 24, 2024, 12:27 PMAgree Teitei,can't see anyone brave enough for a takeover until these issues are sorted. If Forbar are right and a cap raise is coming it will put further pressure on the share price.
Back in October 23 Jarden analyst Grant Swanepoel said about the BGC forecast loss from the iplex pipes. "Worst case scenario would be $1.3 billion"
Brokers Macquarie and Morgan Stanley cut their price targets on the stock by 5% and 6% to $2.43 and $2.90 per share respectively.
Don't think we have seen the bottom.
Sobering.
Market cap now about $2.35 billion - around the same amount as the $2.3 billion of abnormal and extraordinaries (as collated by W69)!
I recently learned that over 5,000 employees earn more than $100K. Although I recognize that $100K does not hold the same purchasing power as before, I am curious about how many individuals earn over $250K. I believe a significant factor in the consistent underperformance of companies like WHS and FBU is a deeply ingrained culture of greed and entitlement, originating from the top echelons of the company.
Gosh I hope FBU has got good lawyers. I guess they could always put Australian operations into liquidation to protect NZ company.
https://10play.com.au/theproject/articles/statements-regarding-was-bursting-water-pipe-crisis/tpa240822vlzte
Quote from: Shareguy on Aug 24, 2024, 01:23 PMGosh I hope FBU has got good lawyers. I guess they could always put Australian operations into liquidation to protect NZ company.
https://10play.com.au/theproject/articles/statements-regarding-was-bursting-water-pipe-crisis/tpa240822vlzte
You never know, it might come to that.
Quote from: Basil on Aug 24, 2024, 01:14 PMI recently learned that over 5,000 employees earn more than $100K. Although I recognize that $100K does not hold the same purchasing power as before, I am curious about how many individuals earn over $250K. I believe a significant factor in the consistent underperformance of companies like WHS and FBU is a deeply ingrained culture of greed and entitlement, originating from the top echelons of the company.
Page 82 will make your eyes water :'( https://fletcherbuilding.com/assets/4-investor-centre/annual-reports/2024-annual-report.pdf
Quote from: Buzz on Aug 24, 2024, 01:36 PMPage 82 will make your eyes water :'( https://fletcherbuilding.com/assets/4-investor-centre/annual-reports/2024-annual-report.pdf
WOW.
Looking at the annual report Building products Australia is a 100 percent subsidiary of FBU.
FY24 sales $1979m with $129m EBITDA before write downs.
I can well see why BGC would be worried. Take the Tradelink payment and tip Australia into liquidation. It's not as if FBU has a stella reputation to protect.
Quote from: Shareguy on Aug 24, 2024, 01:23 PMGosh I hope FBU has got good lawyers. I guess they could always put Australian operations into liquidation to protect NZ company.
https://10play.com.au/theproject/articles/statements-regarding-was-bursting-water-pipe-crisis/tpa240822vlzte
Must admit the above is rather grim reading, especially this part :
"The investigation into a product recall is ongoing. Once finalised, advice will be provided to the Commerce Minister for her consideration.
This would be the first recall of its kind in Western Australia – it is a complex process and requires thorough investigation to ensure the best outcome for those impacted."
Impact of a product recall would be financially catastrophic for Iplex - presumably all piping installed would have to be un-installed and new approved piping installed! The mind boggles.
Quote from: Buzz on Aug 24, 2024, 01:36 PMPage 82 will make your eyes water :'( https://fletcherbuilding.com/assets/4-investor-centre/annual-reports/2024-annual-report.pdf
Where do I join......I can mess things up as well as the next person....especially if was well paid to do it ;)
Quote from: Sideshow Bob on Aug 26, 2024, 12:59 PMWhere do I join......I can mess things up as well as the next person....especially if was well paid to do it ;)
Am told by an ex-executive (FBU Residential) that there are a lot of really peeved off executives in NZ in the profitable business divisions who have seen their hard work & profits squandered by the company.
Very sad commentary really on what a sorry state FBU is in.
Quote from: Teitei on Aug 26, 2024, 08:34 AMMust admit the above is rather grim reading, especially this part :
"The investigation into a product recall is ongoing. Once finalised, advice will be provided to the Commerce Minister for her consideration.
This would be the first recall of its kind in Western Australia – it is a complex process and requires thorough investigation to ensure the best outcome for those impacted."
Impact of a product recall would be financially catastrophic for Iplex - presumably all piping installed would have to be un-installed and new approved piping installed! The mind boggles.
15000 homes involved with the suspect product used.......just to many actual events happening on a monthly basis now so I think a recall is on the cards,, dux quest all over again
Quote from: snapiti on Aug 26, 2024, 02:14 PM15000 homes involved with the suspect product used.......just to many actual events happening on a monthly basis now so I think a recall is on the cards,, dux quest all over again
Say $50,000 a home to fix - that's $750m problem!
Quote from: Teitei on Aug 26, 2024, 02:17 PMSay $50,000 a home to fix - that's $750m problem!
I had a friend have a large 2 story home completely replumbed 3 years ago due to dux quest leaks......cost 40k.....the house was big though but was 3 years ago
Quote from: Teitei on Aug 26, 2024, 02:17 PMSay $50,000 a home to fix - that's $750m problem!
Might be cheaper in the beginning if they get FBU to do the replumbing. Remember the pristine job they did in the Christchurch earth quake repairs - they are really good to screw big jobs up!
Only problem might be the subsequent cost they might need to budget to fix the fixes.
FBU has announced on the ASX
Fletcher Building Acknowledges BGC Legal Action
Auckland, 27 August 2024: Fletcher Building Limited (FBU) advises that it previously
(on 22 August 2024) announced that Western Australian home builder, BGC, had
advised of its intention to file legal proceedings against FBU subsidiary, Iplex Pipelines
Australia (Iplex AU), in relation to the Iplex Pro-Fit Pipes issues. Those legal proceedings
have now been received by Iplex AU.
Iplex AU intends to defend the proceedings.
FBU and Iplex AU have no further comment to make on this matter at this time.
Quote from: Shareguy on Aug 27, 2024, 07:03 PMFBU has announced on the ASX
Fletcher Building Acknowledges BGC Legal Action
Auckland, 27 August 2024: Fletcher Building Limited (FBU) advises that it previously
(on 22 August 2024) announced that Western Australian home builder, BGC, had
advised of its intention to file legal proceedings against FBU subsidiary, Iplex Pipelines
Australia (Iplex AU), in relation to the Iplex Pro-Fit Pipes issues. Those legal proceedings
have now been received by Iplex AU.
Iplex AU intends to defend the proceedings.
FBU and Iplex AU have no further comment to make on this matter at this time.
What a freaking mess FBU has made of its overseas acquisitions - basically pxssing all the profits made in NZ down the proverbial overseas.
Heard the other day that the Skycity Conference Centre will be delayed finishing until March next year at earliest.
FBU not taking on anymore commercial projects now, the majority of work force will be made redundant, so could slow the project up??
What a complete and utter cluster f@$k that convention centre has been.
I sometimes wonder when driving past it whether it will ever be finished.
Meanwhile......Allan announced increased their holding to over 15%.
Contrarian...... ::)
Quote from: Basil on Aug 28, 2024, 08:55 AMWhat a complete and utter cluster f@$k that convention centre has been.
I sometimes wonder when driving past it whether it will ever be finished.
$1.045 billion is what is expected for the total cost to build NZICC by FBU. Compared to initial contract price of $450m.
Staggering!
Sounding ominous ... WA government to announce product recall?
https://api.nzx.com/public/announcement/437160/attachment/426151/437160-426151.pdf
Wouldn't be a trading halt and a conference call if they were getting away free ;)
Quote from: Teitei on Aug 30, 2024, 09:08 AMSounding ominous ... WA government to announce product recall?
https://api.nzx.com/public/announcement/437160/attachment/426151/437160-426151.pdf
No recall but agreement for FBU to carry a big chunk of the remedial cost -
A$155m or NZ$170m provision to be made.
Any bets that there will be more provisioning in future?
https://www.nzx.com/announcements/437241
Quote from: Teitei on Aug 30, 2024, 01:24 PMNo recall but agreement for FBU to carry a big chunk of the remedial cost -
A$155m or NZ$170m provision to be made.
Any bets that there will be more provisioning in future?
https://www.nzx.com/announcements/437241
FBU costs/liabilities are uncapped, Aus Government capped at $30m
I would suggest this was the only way to stop a complete product recall, not sure why the market responded positively.
"Iplex AU's offer of funding Participating Builders' direct costs at the rate of 80% is not capped. The WA Government's 20% contribution is capped at A$30 million (but there is the opportunity for parties to confer with the Government if its funding reaches A$26 million)".
Just what we've come to expect from FBU. This is another convention center scale cluster f@#k in my opinion. Years of further huge "one-off" write-off's.
interesting they were in total denial not that long ago, now have offered uncapped remedial works.
Negotiating would have been simple.....
your product is defective and we are gonna recall it.
If you do that we will have to put the company in receivership (FBU Aust) and nobody gets anything.
We propose we offer uncapped remedial work and fix the issues as they arise, that way we can make provisions (that our Shers are use to) whenever it suits to do so.
This issue is going to haunt the company for decades.
Quote from: snapiti on Aug 30, 2024, 06:02 PMthat way we can make provisions (that our Shers are use to)
Yeap regular $100m+ so called one off extraordinary items are just the usual at FBU as per Winners excellent recent image, see post#337
In fact, it's quite rare to have a year when there are extraordinary items of less than $100m lol.
Significant item so doesn't really count in profit reporting
But going to hurt future cash flows quite significantly
Quote from: winner (n) on Aug 30, 2024, 06:07 PMSignificant item so doesn't really count in profit reporting
But going to hurt future cash flows quite significantly
Market already starting to fret a bit. Fletcher bonds which were already trading at elevated level's of around 9% recently are now second only to Synlait in terms of trading at semi distressed level's. e.g. FBU190 11.75% FBU 200 March 2026 bonds 11.25% I reckon those will go higher still and am definitely not a buyer.
Speaking of distressed and all things Synlait, those bonds now at 27% and heading back up over Penno objection complaint which the NZX are obviously taken seriously, or they would have already dismissed it. I reckon he has appointed high powered lawyers who may be threatening a high court injunction if the matter is not resolved to his satisfaction. That's not over by any stretch of the imagination.
Quote from: Basil on Aug 30, 2024, 06:15 PMMarket already starting to fret a bit. Fletcher bonds which were already trading at elevated level's of around 9% recently are now second only to Synlait in terms of trading at semi distressed level's. e.g. FBU190 11.75% FBU 200 March 2026 bonds 11.25% I reckon those will go higher still and am definitely not a buyer.
Speaking of distressed and all things Synlait, those bonds now at 27% and heading back up over Penno objection complaint which the NZX are obviously taken seriously, or they would have already dismissed it. I reckon he has appointed high powered lawyers who may be threatening a high court injunction if the matter is not resolved to his satisfaction. That's not over by any stretch of the imagination.
Those are not bonds but capital notes - effectively equity as they are not only subordinated to all indebtness of FBU but are repayable only via conversion into FBU shares! Noteholders can choose to rollover into another series of capital notes or convert into FBU shares. With FBU shares slip sliding lower, hardly the sort of fixed interest securities that prudent income investors would want to hold. Get the shares and by the time a noteholder sells, they may find it is down 20%!
Some Synlait bonds obviously are still held by some nervous souls some of whom sold their bonds at 40 cents in the dollar not that long ago. Same bonds are currently trading at 94.5c.
Penno is wasting his money and time but hi, he must be beating himself up and wondering why he initiated the Pokeno plant as CEO, tried a fast one on ATM with his own company and did not sell his 5.1m shares when he could at $10+? Are the institutions (who voted overwhelmingly for the Bright loan of $130m) going to support his hara kiri exercise? Do turkeys vote for Christmas?
The in-principle agreement in perspective for affected homeowners and BGC.
Lots more water to flow under the bridge - so to speak.
https://www.watoday.com.au/national/western-australia/iplex-builders-government-to-pay-up-for-leaking-pipes-in-wa-homes-20240830-p5k6ou.html
Thousands of West Australians are part of a federal class action against Iplex over the matter.
BGC is also pursuing litigation.
In a statement, Iplex said it intended to defend the lawsuits.
"Despite reaching an in-principle agreement on the Joint Industry Response, legal and financial risks remain for Iplex AU and Fletcher Building.," it said.
"If a current or future matter was successfully brought against Iplex AU, it may have a material adverse impact to the group."
Quote from: Teitei on Aug 30, 2024, 07:55 PMThose are not bonds but capital notes - effectively equity as they are not only subordinated to all indebtness of FBU but are repayable only via conversion into FBU shares! Noteholders can choose to rollover into another series of capital notes or convert into FBU shares. With FBU shares slip sliding lower, hardly the sort of fixed interest securities that prudent income investors would want to hold. Get the shares and by the time a noteholder sells, they may find it is down 20%!
Thanks for unpacking that. They really are junk bonds then and now that FBU has another NZICC sized fiasco on its hands why would anyone bother given the vast size of FBU's senior debt !
Quote from: Teitei on Aug 31, 2024, 11:19 AMThe in-principle agreement in perspective for affected homeowners and BGC.
Lots more water to flow under the bridge - so to speak.
https://www.watoday.com.au/national/western-australia/iplex-builders-government-to-pay-up-for-leaking-pipes-in-wa-homes-20240830-p5k6ou.html
Thousands of West Australians are part of a federal class action against Iplex over the matter.
BGC is also pursuing litigation.
In a statement, Iplex said it intended to defend the lawsuits.
"Despite reaching an in-principle agreement on the Joint Industry Response, legal and financial risks remain for Iplex AU and Fletcher Building.," it said.
"If a current or future matter was successfully brought against Iplex AU, it may have a material adverse impact to the group."
Unless insurance covers a great part of this or they sell some stuff I think Forbar are right, that a cap raise is coming.
Ross coming out all guns blazing with denials and in a few short months FBU are once again forking out, does not bode well. I think the claims are going to be huge and based on FBU past experience share holders will pay the price.
Fletchers have some great buisiness"s and I'm sure plenty of great people who at the moment are all probably looking at thier future. A number of the staff will have lost out on a good chunk of their bonuses because of all this.
I cant see any buyer having a go at this company while these claims are active.
Good luck to holders
Less than I expected. I'm surprised at the share price holding up. When you consider the company's history, projects still not completed, BGC claim estimated by them $A700m plus the class action. I would have thought any cr would have to be very heavily discounted and even then I can't see many institutions taking a gamble. I have been reading the Reddit thread on the leaking pipes, not good.
https://www.afr.com/street-talk/fletcher-building-wall-crosses-investors-for-500m-plus-raising-20240920-p5kc61
https://www.bgc.com.au/bgc-open-to-joining-industry-agreement-but-precluded-due-to-litigation-seeking-security-of-a-long-term-deal/
https://iplexclassaction.com.au/
oooooooooooooooooooooooooooffff
https://www.nzx.com/announcements/438502
Great....another large capital raise / dead rat for the market to swallow.
Yep. Will be interesting in how many retail investors participate. It's all going on debt repayment. FBU say "supports our commitment to maintaining an investment grade credit rating and covenant headroom under our debt facilities".
In other words it's a bloody emergency. We are bleeding cash and the future is going to bleed more cash and the banks or bank want out as we approach covenant headroom ceiling.
Presentation https://api.nzx.com/public/announcement/438502/attachment/427718/438502-427718.pdf
Proceeds all going on debt repayment. As Shareguy has mentioned, forget all the creative corporate B.S. speak, banks put a gun to their head and told them to reduce debt or else !
My 2 cents. It won't take them all that long to get into deep doggy doo again.
Disc: I've never been an investor in FBU.
Quite amazing ... asking for $700m at $2.40 per share.
Interesting wording in the announcement as well:
"Whilst the Company expects that market conditions will eventually recover ...."
Based on my limited understanding of the English language does "eventually" mean an unspecified but normally quite long time frame.
Hmm.
Just wondering, whether we might eventually see a "$1" handle for the shares - and whether the latter might happen in a shorter timeframe than the recovery of Fletchers specific market conditions?
Anyway - so glad I sold my parcel before the latest company droppings (yes, I admit it - at some stage I still thought they might be able to benefit from the emerging green shoots in the economy) ... much more fun to watch these dramas unfold without having skin in the game.
Quote from: BlackPeter on Sep 23, 2024, 09:51 AMBased on my limited understanding of the English language does "eventually" mean an unspecified but normally quite long time frame.
Hmm.
Just wondering, whether we might eventually see a "$1" handle for the shares - and whether the latter might happen in a shorter timeframe than the recovery of Fletchers specific market conditions?
Cambridge Dictionary describes the word eventually to mean
Quoteeventually
adverb
uk /ɪˈven.tʃu.ə.li/ us /ɪˈven.tʃu.ə.li/
Add to word list
B2
in the end, especially after a long time or a lot of effort, problems, etc.:
Although she had been ill for a long time, it still came as a shock when she eventually died.
Oh dear...the reference to death is perhaps a little unfortunate. As to the prospects of this eventually having a $1 handle, as Winner astutely points out on the other channel.
Quote"7 pages of Disclaimer .......and 15 pages of 'what can go wrong'
More than half the presentation"
Must admit, I have never seen such a comprehensive backside covering set of statements in a presentation before.
I think its fair to say they want to avoid the prospects of even more lawsuits lol
What could possibly go wrong in all this mess lol
If you are an employee of FBU and are in the FBU share where you buy FBU shares automatically from your pay after tax. Do not fret, according to the FBU website you can log in and view how many shares you own and what they are worth 24/7.
I wonder if the share scheme trust will participate in the cap raise.
From what I hear, the Culture down at HQ in Penrose is at an all time low. They have been laying alot of staff off. And that's saying something.
Quote from: Toddy on Sep 23, 2024, 10:50 AMIf you are an employee of FBU and are in the FBU share where you buy FBU shares automatically from your pay after tax. Do not fret, according to the FBU website you can log in and view how many shares you own and what they are worth 24/7.
I wonder if the share scheme trust will participate in the cap raise.
From what I hear, the Culture down at HQ in Penrose is at an all time low. They have been laying alot of staff off. And that's saying something.
I am sure you meant to say "Morale". The culture of greed and entitlement runs very deep in FBU and the tone has been set from the top with exorbitant salaries for senior management for appalling performance and massive directors fees for egregiously poor governance. Can't blame the vast hordes of middle management for their sense of greed and entitlement, they're merely following the examples of the board and senior management. Culture in an organization is very difficult to change, often impossible. For mine, the culture of the place makes FBU uninvestable.
Things still pretty rough out there for Fletchers with much less activity than FY24
No worries as the boss says they are on track "to fulfil our potential and to build a company that our people, customers, communities and our shareholders, can be proud of."
https://api.nzx.com/public/announcement/440488/attachment/430196/440488-430196.pdf
Fletcher Building Price Target Cut 7.1% to NZ$2.22/Share by Macquarie
FBU share price now cemeted in the 2.xx range for a while, I don't believe the much touted infrastructure spend by govt will do anything except keep them afloat for a while, as FBU ability to make a profit on contracts seems to be hit and miss at best.
Jenny is on the money
So my reaction to the news that Chapman had covid and therefore couldn't attend was a Tui's: "Yeah, right." The good news was that in her pre-recorded address to the AGM, Chapman announced she would step down from the board once her successor has been appointed. The bad news is that she doesn't expect that to happen until "the first quarter of next calendar year."
https://justthebusinessjennyruth.substack.com/p/do-fletcher-buildings-shareholders
What a coward. Speaking of such, I'd wager there's a very good reason Jeff has stepped down hurriedly, (recalling his resignation was originally scheduled for later this year), from all roles before the Heartland AGM next week.
Cowards would rather go into hiding than face the music. Should be an interesting HGH meeting next week. I have lots of curly questions for the board.
https://www.nzherald.co.nz/business/fletcher-living-at-winstones-ex-three-kings-quarry-massive-plan-downsize/Q5RL6M44ABFAXEAXPQKOKJTVAI/
Plans downsized a lot for three kings development. Paywalled.
Interesting development. I walked my dog up the three kings hill immediately adjacent to this development a few weeks ago and views from different parts of that hill give an excellent overview of the whole scheme as well as outstanding views over Auckland. Well and truly worth the effort, especially on a fine day, and my dog enjoyed walking somewhere new too. I think they're doing a good job there but the culture of greed and entitlement that runs very deep at Fletchers makes them uninvestable in my opinion.
Information on this interesting place to have a walk is here https://www.freewalks.nz/three-kings-walks-auckland/
SkyCity is suing Fletcher Building and the Fletcher Construction Company for $330 million, saying it had taken 10 years instead of three to build the New Zealand International Convention Centre.
In an NZX notice issued today, SkyCity explained the action.
The claim seeks damages for losses incurred by SkyCity arising from ongoing delays in the completion of the project, including those that resulted from the 2019 fire.
In response, Fletcher said it had already flagged risks associated with the convention centre (NZICC), it was committed to delivering the project and would vigorously defend itself.
But SkyCity said the NZICC was now nearly six and a half years behind the contractually agreed delivery date of January 2019.
--- oopsie.
FBU's response to today's SKC legal action
https://www.nzx.com/announcements/452931
Ouch (thankfully not a holder)
One thing for sure is that some very high priced commercial lawyers will be winners.
Quote from: Basil on Jun 06, 2025, 11:12 AMOne thing for sure is that some very high priced commercial lawyers will be winners.
True ... while they say that it is the house which always wins (talking about a casino business), lawyers clearly stand still above them in the foodchain.
The other thing we already know: it is always shareholders who are going to pay. My money would be on the FBU share holders being further fleezed (how much below the skin can one go?) , but SKC shareholders might well contribute to the loot.
Let the games continue - watching these two fight is nearly as much fun as seeing Elon and Chump ripping into each other.
It's not as bad as stated
SKC's claim (now totaling >$330m), is inclusive of liquidated damages paid to date, which implies that SKC are seeking an additional c.$75m - $100m of compensation from FBU.
Who pays... well agree with Bp.
The write-offs over many many years, never ever end at Fletchers. I actually think there is a culture within the company that write-off's are just part of normal business operations and are perfectly okay. There is a culture of greed and arrogance that runs very deep in FBU and starts right from the top with the board, despite their truly appalling performance over the years, being the highest paid on the NZX. The greed and arrogance runs deep within that company. Totally uninvest-able at any price.
https://www.nzx.com/announcements/453802 Except • In addition to the Significant Items already announced:
– ~$10m to ~$15m is expected to be incurred in relation to defending construction legacy and Western Australia plumbing issues.
– As a result of the strategic review actions taken, additional non-cash Significant Items of between ~$250m and ~$440m and cash Significant Items of between ~$50m and ~$60m are expected in FY25, which will be finalised as part of year end reporting. These will primarily relate to restructuring and redundancy costs, goodwill and brand impairments, closure costs and the write off and provision for onerous contracts associated with ERP projects.
Altogether the total Significant Items to be announced as part of the FY25 results are expected to be between ~$573m and ~$781m.
Significant Items are business as usual
IMG_6180.png
Oh my goodness, thanks mate....words almost fail me. So this is their worst ever year of write-offs by miles !
The cockroaches just keep on coming and are getting even bigger !!
Quote from: Basil on Jun 24, 2025, 10:27 AMThere is a culture of greed and arrogance that runs very deep in FBU and starts right from the top with the board, despite their truly appalling performance over the years, being the highest paid on the NZX.
The board is mostly refreshed tho? 4 out of 7 from 2024/5. 1 from 23, 1 from 18, 1 from 19.
Quote from: Basil on Jun 24, 2025, 10:27 AMAs a result of the strategic review actions taken, additional non-cash Significant Items of between ~$250m and ~$440m
Surely these were 'cash' at some point? Unless they are reversing upwards revaluations made in prior periods....what am I not understanding about this being non-cash? Unless perhaps shares were issued in lieu of cash to acquire a business.....but that has a cost to other shareholders.
Quote from: Basil on Jun 24, 2025, 10:39 AMOh my goodness, thanks mate....words almost fail me. So this is their worst ever year of write-offs by miles !
The cockroaches just keep on coming and are getting even bigger !!
And at $370m Before Significant Items one of their worse years
Quote from: entrep on Jun 24, 2025, 11:23 AMThe board is mostly refreshed tho? 4 out of 7 from 2024/5. 1 from 23, 1 from 18, 1 from 19.
They haven't reduced their directors fees pool though. They need to lead from the top in terms of a new efficiency drive if they want their restructuring to be successful. For what its worth, I've had a little bit to do with Steve Evans head of residential development on behalf of a client for whom I'm a professional trustee in years past. I wasn't impressed at all with how he or FBU conducted themselves.
Quote from: winner (n) on Jun 24, 2025, 11:31 AMAnd at $370m Before Significant Items one of their worse years
Thanks for highlighting that fact which is very easily overlooked with the dizzying amount of extraordinary items !
Quote from: Ferg on Jun 24, 2025, 11:29 AMSurely these were 'cash' at some point? Unless they are reversing upwards revaluations made in prior periods....what am I not understanding about this being non-cash? Unless perhaps shares were issued in lieu of cash to acquire a business.....but that has a cost to other shareholders.
Mostly cash at one time in the past - but non-cash for this year so they present a better picture.
And restructuring costs are cash out in current and future periods as they pay people out etc
At least a guy who's been paid $100k a year in the past and now no longer required can take some consolation by knowing he's a significant item (cost of getting rid of him)
Quote from: entrep on Jun 24, 2025, 11:23 AMThe board is mostly refreshed tho? 4 out of 7 from 2024/5. 1 from 23, 1 from 18, 1 from 19.
Been 'refreshed' a few times now over the years and nothing has changed
With the lowest operating earnings in many, many years and the highest extraordinary items ever, why wouldn't this go down and test the decade low of ~ $2.60... I guess there will always be some who believe this time its different and all the financial skeletons are now finally out of the closet.
Quote from: Basil on Jun 24, 2025, 11:48 AMWith the lowest operating earnings in many, many years and the highest extraordinary items ever, why wouldn't this go down and test the decade low of ~ $2.60... I guess there will always be some who believe this time its different and all the financial skeletons are now finally out of the closet.
Surely a bet on a takeover would be the only possible reason for buying now?
Fancy being an investor/analyst and sitting through those presentations
They deserve a medal
And it was closed to the media
I hope its not going to be as bad as the chart indicates.
FBU_2025-06-24_15-51-10~2.png
I wonder what Allan Gray makes of this considering he is now close to that 20% threshold. Sharks must now be circling for the shambles FBU are.
Worth more pulled apart than together. One wonders what the banks are thinking? Do they require another CR especillay with all the litigations going on.
Could be worth a punt on takeover prospects only from here, but where is the botton?
Quote from: winner (n) on Jun 24, 2025, 12:56 PMFancy being an investor/analyst and sitting through those presentations
They deserve a medal
And it was closed to the media
You'd need a strong stomach that's for sure mate. Listening to half a day of corporate B.S. about how everything is going to be so much better going forward must be nauseating to say the least for those that have heard different versions of the same crap so many times before.
So Placemakers have lost so much market share in the last five years say new boss. Well it's known amongst many as "ark-rites". They are in the dark ages. Bunnings and others have been taking business left right and centre.
It's worth maybe a punt as a takeover but still real risk is how I see it. A real shame....
Quote from: Shareguy on Jun 25, 2025, 09:28 PMSo Placemakers have lost so much market share in the last five years say new boss. Well it's known amongst many as "ark-rites". They are in the dark ages. Bunnings and others have been taking business left right and centre.
It's worth maybe a punt as a takeover but still real risk is how I see it. A real shame....
I went to a local placemakers last week for the first time in ages . I need a new Kitchen for a rental so browsed the stock & brochures for 5 minutes, then walked around for 5 minutes till I could find someone to help me. "Sorry the Kitchen guy is away for at least another 3 days" ....
I love walking into Bunnings and having the old guy tell me "aisle 37 half way down middle shelf " He never fails.
Quote from: Stoploss on Jun 25, 2025, 11:17 PMI went to a local placemakers last week for the first time in ages . I need a new Kitchen for a rental so browsed the stock & brochures for 5 minutes, then walked around for 5 minutes till I could find someone to help me. "Sorry the Kitchen guy is away for at least another 3 days" ....
I love walking into Bunnings and having the old guy tell me "aisle 37 half way down middle shelf " He never fails.
Yes I think that's a very common experience unfortunately. My last experience was about 6 years ago. Arrrived to pick up a shower that they had ordered in for me. When I arrived could see it was sitting there. Backed my trailer to the door only to be told that I could not pick it up there as had to be taken to outwards goods at the other end of the warehouse. And then godsmacked when the lady told me that due to health and safety she could not help me and that I would have to wait 30 minutes for someone to come back from lunch. I have not been back since.
Last time I was in Placemakers was about 12 years ago.
Bunnings and Mitre 10 offer excellent ranges, service ,advice and prices.
I usually check them out online before buying.
There is a point of difference between Placemakers and Bunnings, Mitre 10.
PM was set up for builders only to the point where you could build a house from PM only. PM was never intended to be a DIY for the rest of us.
PM fell during Covid when they werent able to supply their clients and then treated xxx amount of clients like shite, hence for there enourmous decline past 3 years.
During that time Bunnings, ITM, Mitre 10 have become alot more engaged with this side of the buisness. PM face a very long road from here to gain back market share especially when there name is mud.
back in 22 there was an over weight rating on this one...
now.. probably not.. and there is a law suit coming from a certain cash strapped company that is deciding to either sell assets or CR..
https://www.interest.co.nz/business/134656/fletcher-building-has-taken-over-700m-hit-writedowns-and-given-clearest-indication
FBU is the train wreck that never fail's to deliver. Their endless litany of write-down's year after year after year is unmatched on the NZX. Its always worth reading their litany of excuses for systematic value destruction because they're such a great educational resource on what NOT to do in business.
Disc: Never held and no intention of ever changing that.
Quote from: Basil on Aug 20, 2025, 01:54 PMFBU is the train wreck that never fail's to deliver. Their endless litany of write-down's year after year after year is unmatched on the NZX. Its always worth reading their litany of excuses for systematic value destruction because they're such a great educational resource on what NOT to do in business.
Disc: Never held and no intention of ever changing that.
Yep, absolutely disgraceful, no other words to describe it. I'm surprised that the SP is still over $3 - no dividend, huge losses, incompetent management, on-going legacy issues. Pretty much un-investable imo.
Quote from: LoungeLizard on Aug 20, 2025, 02:30 PMYep, absolutely disgraceful, no other words to describe it. I'm surprised that the SP is still over $3 - no dividend, huge losses, incompetent management, on-going legacy issues. Pretty much un-investable imo.
Or maybe sell FBU and buy SPK for a nice juicy 12.5c div in a few weeks
And lets not forget, the $350m share buy back. I said at the time it was a waste of money.
I guess Ross Taylor and the remainder of the EX's got their bonuses..
January 2017 SP was at a 10 year high of around $9.80
Feb 2017 Fletcher announce "Proud to build Pride for diversity"
"Fletcher Building is a principal sponsor of the Auckland Pride Festival 2017 and is the first construction and building materials company to achieve Rainbow Tick certification. Rainbow Tick certification demonstrates a business is an inclusive organisation for people who are lesbian, gay, bisexual, transgender, takatapui and intersex.
Chief People and Performance Officer Kate Daly said Fletcher Building strives to be a leader in diversity initiatives. "We are really focused on diversity across our business. We want people to know there is no place for prejudice at Fletcher Building, we value diversity and this is a place where you can be your authentic self."
I think it is no coincidence that SP today is $3.08 - a 10 year low.
I am seeing this so often - distractions from core business.
Lets also not forget that their truly woeful performance over many years is against a backdrop of the FBU senior leadership team being amongst the very highest paid of any company on the NZX and the shareholders association claim that the FBU Board are THE very highest paid. This is all the proof you need that having gold plated remuneration packages is not a guarantee of performance. They're happy to continue collecting their gold plated remuneration while shareholders are left out in the cold again and get nothing. Senior management and the board are a bloody disgrace, the whole lot of them.
It's my experience that as soon as a company over empowers an HR dept, it's all downhill for the company from then on. Until FBU sticks to it's knitting and restrains it's over zealous HR colleagues it remains uninvestable IMHO.
Quote from: Basil on Aug 20, 2025, 04:32 PMLets also not forget that their truly woeful performance over many years is against a backdrop of the FBU senior leadership team being amongst the very highest paid of any company on the NZX and the shareholders association claim that the FBU Board are THE very highest paid. This is all the proof you need that having gold plated remuneration packages is not a guarantee of performance. They're happy to continue collecting their gold plated remuneration while shareholders are left out in the cold again and get nothing. Senior management and the board are a bloody disgrace, the whole lot of them.
Agree, sadly the guys and gals at the bottom are the ones who get screwed each time the Senior Management decisions blow up in their face.
I am over FBU. Sooner someone swoops it up and pulls it apart the better.
I think the story goes something like this. . .
A hundred or so years ago, Fletchers were a small Dundedin builder. They grew in the 30s with the State House programme, expanded into general construction during WW2, emerging as a big national construction company.
They rode the national development boom of the 50s & 60s, becoming a conglomerate - New Zealand's biggest company - in the process, with a series of acquisitions, takeovers, and mergers. Then they went international, and got to the point where the consensus was that they had outgrown New Zealand.
At this point they started "unlocking shareholder value". There's been quite a lot of value unlocked over the past twenty-odd years.
Give them another twenty years (if that long) and they'll be back to their roots as a small Dunedin builder.
Is this the New Zealand business cycle at work?
So they brought Higgins for $315m in 2016 and have now sold the constuction division including Higgins, Brian Perry for $315m.
Plus a further provision of $55 to $65m for probable claims relating to legacy contracts.
Well they might need all that cash to help pay out the Iplex claims.
Just a disaster of a company. The board incompetent beyond belief. If they survive the Iplex court case suggest a name change might be in order.
https://www.nzherald.co.nz/business/companies/construction/fletcher-buys-higgins-for-315m-restructures-into-5-divisions/CQMBWPKTYM5UQVMDSSVK7CMOAM/
https://www.nzx.com/announcements/466131
Not to forgot the above provisions do not include anything for the legal action Sky City are taking against them in regard to the convention centre and the fact that it's the highest paid board on the NZX.
Quote from: Shareguy on Jan 21, 2026, 06:27 AMSo they brought Higgins for $315m in 2016 and have now sold the construction division including Higgins, Brian Perry for $315m.
Plus a further provision of $55 to $65m for probable claims relating to legacy contracts.
Well they might need all that cash to help pay out the Iplex claims.
Just a disaster of a company. The board incompetent beyond belief.
I believe a change een ticker, and name of ze company eez coming vith ze zale of ze building division as vell.
Old version: "Fletcher Building, FBU"
New Version: "Fletcher Not Building, FNB"
RB
FBU working hard to give the illusion of progress....
https://www.nzx.com/announcements/467612
1H FY26 highlights
- Revenue from continuing operations of $2,866 million, broadly in line with the prior corresponding period (pcp)
- EBIT from continuing operations before Significant Items of $145 million, reflecting stable underlying performance
- EBIT margin before Significant Items of 5.1%, consistent with pcp
- Net cash from operating activities of $156 million, improved from $87 million in pcp
- Net debt of $1,164 million, was below internal expectation, reflecting disciplined capital allocation and working capital management
- Total available liquidity of approximately $0.8 billion as at 31 December 2025, providing sufficient headroom through the current market cycle
- Return on invested capital before Significant Items (ROIC) of 4.3% (1H FY25: 4.6%)
Possible interest in FBU
Suitors construct case for $3.2b Fletcher Building
https://www.afr.com/street-talk/finally-fletcher-building-inches-up-the-dealmaking-watchlist-20260226-p5o5qq
Register for class action. The deadline to register your claim or opt out of the Class Action is 4:00 pm (AEST) on 20 August 2026 (Class Deadline
https://www-au.computershare.com/WebContent/doc.aspx?docid=%7B71a5b76f-2530-4d84-a3a1-52b5a98e9bd1%7D