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) 1H26 EBIT (excluding construction) was flat on the prior year, which is commendable given the point in the cycle.</li><li>There are signs of cyclical momentum: costs are being reduced with more to come, legacy issues are being closed out, and there is a pathway for net debt to reduce to the low end of its target range.</li><li>The next key newsflow is 3Q/4Q26 volume updates in mid-April and July, and the outcome of the Residential strategic review.</li></ul>

Fletcher Building (FBU) 1H26 EBIT (excluding construction) was flat on the prior year, which is commendable given the point in the cycle.There are signs of cyclical momentum: costs are being reduced with more to come, legacy issues are being closed out, and there is a pathway for net debt to reduce to the low end of its target range.The next key newsflow is 3Q/4Q26 volume updates in mid-April and July, and the outcome of the Residential strategic review.

Fletcher Building 1H26 Result Building Back Better

<ul><li>Fletcher Building (FBU) will report its 1H26 result on Wednesday 18 February.</li><li>We forecast EBIT (excluding construction) to decline -5% on the prior year to NZ$139m (cons. NZ$148m), reflecting continued volume and margin pressure in the materials and distribution divisions, as well as low new home sales.</li><li>While sentiment suggests New Zealand is on the cusp of a cyclical recovery, this has yet to translate into stronger construction activity or FBU’s operating performance.</li></ul>

Fletcher Building (FBU) will report its 1H26 result on Wednesday 18 February.We forecast EBIT (excluding construction) to decline -5% on the prior year to NZ$139m (cons. NZ$148m), reflecting continued volume and margin pressure in the materials and distribution divisions, as well as low new home sales.While sentiment suggests New Zealand is on the cusp of a cyclical recovery, this has yet to translate into stronger construction activity or FBU’s operating performance.

Fletcher Building 1H26 Preview—Laying The Foundations

<ul><li>Fletcher Building (FBU) announced the divestment of its Construction division.</li><li>The price achieved is towards the top end of our estimated value range.</li><li>Furthermore, net debt will reduce to the top end of FBU's target range, potentially allowing for an earlier resumption of dividends.</li></ul>

Fletcher Building (FBU) announced the divestment of its Construction division.The price achieved is towards the top end of our estimated value range.Furthermore, net debt will reduce to the top end of FBU's target range, potentially allowing for an earlier resumption of dividends.

Thematic (Sector/Industry)

<ul><li>Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year.</li><li>The South Island remains the key driver of volume growth, but there were signs of life in the upper North Island.</li><li>The medium-term outlook is improving; the underlying trend in non-residential activity is improving, there have been numerous fast-track approvals, and the infrastructure pipeline is building.</li></ul>

Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year.The South Island remains the key driver of volume growth, but there were signs of life in the upper North Island.The medium-term outlook is improving; the underlying trend in non-residential activity is improving, there have been numerous fast-track approvals, and the infrastructure pipeline is building.

Building Sector Ready-Mix Concrete—Starting to Set

<ul><li>Whilst Fletcher Building’s (FBU) 1Q26 update showed some stabilisation of volumes on prior quarters, competitive pressures continue to impact margins.</li><li>We have reduced our FY26 EBIT forecast to NZ$396m, which is broadly stable on FY25.</li><li>We continue to expect volumes to pick up over FY26/27 as interest rate cuts and government spending flow through to activity.</li></ul>

Whilst Fletcher Building’s (FBU) 1Q26 update showed some stabilisation of volumes on prior quarters, competitive pressures continue to impact margins.We have reduced our FY26 EBIT forecast to NZ$396m, which is broadly stable on FY25.We continue to expect volumes to pick up over FY26/27 as interest rate cuts and government spending flow through to activity.

Fletcher Building 1Q26 Volumes—Bouncing Along the Bottom

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 1H26 Result Building Back Better

Fletcher Building (FBU) 1H26 EBIT (excluding construction) was flat on the prior year, which is commendable given the point in the cycle.

Forsyth Barr

Fletcher Building 1H26 Preview—Laying The Foundations

While sentiment suggests New Zealand is on the cusp of a cyclical recovery, this has yet to translate into stronger construction activity or FBU’s...

Forsyth Barr

Fletcher Building De-Construction

Fletcher Building (FBU) announced the divestment of its Construction division.The price achieved is towards the top end of our estimated value range.

Forsyth Barr

Building Sector Ready-Mix Concrete—Starting to Set

Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year. The...

Forsyth Barr

Fletcher Building 1Q26 Volumes—Bouncing Along the Bottom

Whilst Fletcher Building’s (FBU) 1Q26 update showed some stabilisation of volumes on prior quarters, competitive pressures continue to impact margins.

Forsyth Barr

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