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 (FBU) is set to update the market on its strategic review, which has shifted towards an operating review to avoid selling assets at low multiples during depressed earnings cycles.</li><li>The company plans to focus on operational improvements, including a more decentralized operating model, closure of loss-making businesses, and cost reductions, to enhance shareholder returns.</li><li>Capital and balance sheet management remains a priority, with no immediate plans to sell any business segments despite unsolicited inquiries for its Construction business.</li></ul>

Fletcher Building (FBU) is set to update the market on its strategic review, which has shifted towards an operating review to avoid selling assets at low multiples during depressed earnings cycles.The company plans to focus on operational improvements, including a more decentralized operating model, closure of loss-making businesses, and cost reductions, to enhance shareholder returns.Capital and balance sheet management remains a priority, with no immediate plans to sell any business segments despite unsolicited inquiries for its Construction business.

<ul><li>Residential consents decreased significantly month-on-month and year-on-year, indicating ongoing challenges for the sector.</li><li>Non-residential consents show a mixed performance with some positive signs in office and education sectors, though overall trends remain downward.</li><li>Fletcher Building reports slow sales in residential areas and reduced commercial spending, with no significant improvement expected in market conditions until 2026.</li></ul>

Residential consents decreased significantly month-on-month and year-on-year, indicating ongoing challenges for the sector.Non-residential consents show a mixed performance with some positive signs in office and education sectors, though overall trends remain downward.Fletcher Building reports slow sales in residential areas and reduced commercial spending, with no significant improvement expected in market conditions until 2026.

Building Sector NZ Consents—Bouncing Along the Bottom

<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

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 - Investor Day V.2025

Fletcher Building (FBU) is set to update the market on its strategic review, which has shifted towards an operating review to avoid selling assets...

Forsyth Barr

Building Sector NZ Consents—Bouncing Along the Bottom

Residential consents decreased significantly month-on-month and year-on-year, indicating ongoing challenges for the sector.

Forsyth Barr

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

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