New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue.</li><li>BGC’s investigation has concluded that manufacturing issues are responsible for leaking pipes in the state and BGC believes it warrants a product recall.</li><li>FBU is in trading halt while it formulates a response. We found BGC's presentation to be credible and believe FBU should take the results seriously.</li></ul>

Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue.BGC’s investigation has concluded that manufacturing issues are responsible for leaking pipes in the state and BGC believes it warrants a product recall.FBU is in trading halt while it formulates a response. We found BGC's presentation to be credible and believe FBU should take the results seriously.

<ul><li>Despite pre-releasing significant portions of its FY23 result, Fletcher Building (FBU) still managed to surprise the market.</li><li>The result and outlook comments were not materially different from the investor day in June, in fact margins were stronger and net debt was slightly lower.</li><li>However, the market's focus was (1) the potential for increased Iplex Australia provisions, (2) lower than expected dividend, and (3) greater than expected FY24 interest cost guidance. </li></ul>

Despite pre-releasing significant portions of its FY23 result, Fletcher Building (FBU) still managed to surprise the market.The result and outlook comments were not materially different from the investor day in June, in fact margins were stronger and net debt was slightly lower.However, the market's focus was (1) the potential for increased Iplex Australia provisions, (2) lower than expected dividend, and (3) greater than expected FY24 interest cost guidance. 

Fletcher Building - FY23 Result — No Alarms but Some Surprises

<ul><li>Fletcher Building (FBU) has announced a further NZ$105m (c.10cps post-tax) provision for its troubled New Zealand International Convention Centre (NZICC) project relating to further cost increases and insurance recoveries.</li><li>This provision will be reported as a significant item, as such we have made only minor changes to our forecasts.</li><li>FBU will report its FY23 results on Wednesday, 16 August. </li></ul>

Fletcher Building (FBU) has announced a further NZ$105m (c.10cps post-tax) provision for its troubled New Zealand International Convention Centre (NZICC) project relating to further cost increases and insurance recoveries.This provision will be reported as a significant item, as such we have made only minor changes to our forecasts.FBU will report its FY23 results on Wednesday, 16 August. 

Fletcher Building-  Provision-Ja Vu All Over Again

<ul><li>Volume slowing but forward indicators have picked up​​​​​​​: FY23 volumes declined -5–7% vs. 2H22 levels, led by residential with infrastructure and commercial more stable. </li><li>Margins holding up, for now: Despite lower volumes, margins remain resilient reflecting pricing discipline and cost management.</li><li>Investment continues, free cash flow to follow?: FBU's growth investment is well advanced with NZ$300m spent in FY23 and a further NZ$500m to spend over the next three years (NZ$250m in FY24) which is expected to contribute NZ$120m EBIT at full run-rate from FY27+ (NZ$35m in FY24). </li></ul>

Volume slowing but forward indicators have picked up​​​​​​​: FY23 volumes declined -5–7% vs. 2H22 levels, led by residential with infrastructure and commercial more stable. Margins holding up, for now: Despite lower volumes, margins remain resilient reflecting pricing discipline and cost management.Investment continues, free cash flow to follow?: FBU's growth investment is well advanced with NZ$300m spent in FY23 and a further NZ$500m to spend over the next three years (NZ$250m in FY24) which is expected to contribute NZ$120m EBIT at full run-rate from FY27+ (NZ$35m in FY24). 

Fletcher Building: FY23 Investor Day — Relatively Level

<ul><li>We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.</li><li>Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855m</li><li>The top end of the range is based on 800 settlements and residential division EBIT of NZ$185m (NZ$136m 2H23 EBIT).</li></ul>

We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855mThe top end of the range is based on 800 settlements and residential division EBIT of NZ$185m (NZ$136m 2H23 EBIT).

Fletcher Building (FBU): Fletcher Living Website Tracker - May Update

Australia

Fletcher Building Limited manufactures, distributes, and sells materials for the building industry including wood fiber-based products, cement and aggregates, plasterboard, laminates, lumber, and aluminium extrusion. The Company operates primarily in New Zealand and Australia.

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Fletcher Building (FBU AU)

Fletcher Building - Pro-Fit Leaks?

Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue. BGC’s investigation has...

Forsyth Barr

Fletcher Building - FY23 Result — No Alarms but Some Surprises

Despite pre-releasing significant portions of its FY23 result, Fletcher Building (FBU) still managed to surprise the market. The result and...

Forsyth Barr

Fletcher Building- Provision-Ja Vu All Over Again

Fletcher Building (FBU) has announced a further NZ$105m (c.10cps post-tax) provision for its troubled New Zealand International Convention Centre...

Forsyth Barr

Fletcher Building: FY23 Investor Day — Relatively Level

There was no significant positive or negative surprises at Fletcher Building's (FBU) investor day; FY23 EBIT guidance was reduced to NZ$800m, the...

Forsyth Barr

Fletcher Building (FBU): Fletcher Living Website Tracker - May Update

We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website; Home sales are a key swing factor in FBU’s...

Forsyth Barr

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