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>Fletcher Building announced a divisional restructure and reported no material improvement in NZ trading since its 1H25 result, with non-residential and infrastructure activity weak and home sales in its residential division subdued.</li><li>The company is expected to lower costs by NZ$15m, with further business-improvement initiatives anticipated to be outlined at its investor day in June 2025.</li><li>FBU trades at a two-year forward PE of 12.2x, broadly in line with its long-run average, with a NEUTRAL sentiment on the outlook.</li></ul>

Fletcher Building announced a divisional restructure and reported no material improvement in NZ trading since its 1H25 result, with non-residential and infrastructure activity weak and home sales in its residential division subdued.The company is expected to lower costs by NZ$15m, with further business-improvement initiatives anticipated to be outlined at its investor day in June 2025.FBU trades at a two-year forward PE of 12.2x, broadly in line with its long-run average, with a NEUTRAL sentiment on the outlook.

<ul><li>Residential consents experienced a revival, exceeding the 30k-35k range for the first time in 19 months, with a third consecutive month of gains.</li><li>Non-residential consents improved in March, but the value and approved area continue to decline on a 12-month rolling basis.</li><li>Government announcements on health, education, and transport investments are beginning to firm up the non-residential and infrastructure pipeline.</li></ul>

Residential consents experienced a revival, exceeding the 30k-35k range for the first time in 19 months, with a third consecutive month of gains.Non-residential consents improved in March, but the value and approved area continue to decline on a 12-month rolling basis.Government announcements on health, education, and transport investments are beginning to firm up the non-residential and infrastructure pipeline.

Building Sector NZ Consents—Residential Revival

<ul><li>Fletcher Building (FBU) reported 1H25 EBIT down -37%, reflecting a cyclically weak operating backdrop but slightly exceeding our and market expectations.</li><li>This has been a long cycle—35 months after FBU's pre-GFC peak, its share price had rallied 50%+ from its lows; we are now 44 months into this cycle.</li><li>Like then, interest rates are being cut and forward indicators are improving, suggesting the downturn may be nearing an end. </li></ul>

Fletcher Building (FBU) reported 1H25 EBIT down -37%, reflecting a cyclically weak operating backdrop but slightly exceeding our and market expectations.This has been a long cycle—35 months after FBU's pre-GFC peak, its share price had rallied 50%+ from its lows; we are now 44 months into this cycle.Like then, interest rates are being cut and forward indicators are improving, suggesting the downturn may be nearing an end. 

Fletcher Building - 1H25 Result—Light at the End of a Long Tunnel

<ul><li>Fletcher Building (FBU) will report its 1H25 result on Wednesday, 19 February.</li><li>We expect EBIT to decline -38% to NZ$162m, driven by broad-based volume declines and competitive margin pressure.</li><li>While forward indicators have improved, data and anecdotal evidence suggest construction activity was still rebasing in the December 2024 quarter, making the first half of 2025 likely to remain challenging. </li></ul>

Fletcher Building (FBU) will report its 1H25 result on Wednesday, 19 February.We expect EBIT to decline -38% to NZ$162m, driven by broad-based volume declines and competitive margin pressure.While forward indicators have improved, data and anecdotal evidence suggest construction activity was still rebasing in the December 2024 quarter, making the first half of 2025 likely to remain challenging. 

Fletcher Building - 1H25 Preview—Where to Next?

<ul><li>Fletcher Building (FBU) announced that the joint industry response (JIR) for its Pro-Fit pipe leak issues in Western Australia has been finalised.</li><li>The key terms from the agreement are unchanged from the announcement in August.</li><li>While the finalisation of the JIR does not fully sterilise the issue, with litigious risk and potential cost overrun the key risks from here, this is an important step for FBU to draw a line in the sand on this issue. </li></ul>

Fletcher Building (FBU) announced that the joint industry response (JIR) for its Pro-Fit pipe leak issues in Western Australia has been finalised.The key terms from the agreement are unchanged from the announcement in August.While the finalisation of the JIR does not fully sterilise the issue, with litigious risk and potential cost overrun the key risks from here, this is an important step for FBU to draw a line in the sand on this issue. 

Fletcher Building - WA Pipes Joint Industry Response Finalised

New Zealand

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 NZ)

Fletcher Building - Longer Trough

The company is expected to lower costs by NZ$15m, with further business-improvement initiatives anticipated to be outlined at its investor day in...

Forsyth Barr

Building Sector NZ Consents—Residential Revival

Residential consents experienced a revival, exceeding the 30k-35k range for the first time in 19 months, with a third consecutive month of gains.

Forsyth Barr

Fletcher Building - 1H25 Result—Light at the End of a Long Tunnel

Fletcher Building (FBU) reported 1H25 EBIT down -37%, reflecting a cyclically weak operating backdrop but slightly exceeding our and market...

Forsyth Barr

Fletcher Building - 1H25 Preview—Where to Next?

Fletcher Building (FBU) will report its 1H25 result on Wednesday, 19 February. We expect EBIT to decline -38% to NZ$162m, driven by broad-based...

Forsyth Barr

Fletcher Building - WA Pipes Joint Industry Response Finalised

Fletcher Building (FBU) announced that the joint industry response (JIR) for its Pro-Fit pipe leak issues in Western Australia has been finalised.

Forsyth Barr

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