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) has added a further NZ$180m of provisions in its construction division, largely relating to the NZ International Convention Centre (NZICC).</li><li>This is particularly disappointing given it has been just six months since the last one and continues to bring into question management controls and board oversight.</li><li>The ultimate cash cost will see gearing reach the top end of FBU's target range and we expect a reduction in dividends and cuts to the growth capex pipeline at its upcoming 1H24 result (14 February) to provide some headroom. </li></ul>

Fletcher Building (FBU) has added a further NZ$180m of provisions in its construction division, largely relating to the NZ International Convention Centre (NZICC).This is particularly disappointing given it has been just six months since the last one and continues to bring into question management controls and board oversight.The ultimate cash cost will see gearing reach the top end of FBU's target range and we expect a reduction in dividends and cuts to the growth capex pipeline at its upcoming 1H24 result (14 February) to provide some headroom. 

Fletcher Building  - NZICC Steels More Cash

Thematic (Sector/Industry)

<div id="m_2532418749359313970iubdj-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2"><ul><li>After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.</li><li>The decline was concentrated in metro areas, in particular Wellington and Auckland, and there were similar levels of declines in both detached and high density dwellings.</li><li>While consents are likely to continue to soften over the first half of 2024, forward indicators suggest activity will likely improve over 2024. </li></ul></div>

After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.The decline was concentrated in metro areas, in particular Wellington and Auckland, and there were similar levels of declines in both detached and high density dwellings.While consents are likely to continue to soften over the first half of 2024, forward indicators suggest activity will likely improve over 2024. 

Building Sector - NZ Consents — A Year in Decline

<ul><li>September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.</li><li>The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).</li><li>Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. </li></ul>

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. 

Building Sector - Ready-Mix Concrete — Set in Its Way

<ul><li>Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38% below the February 2022 peak.</li><li>The decline was largely in higher density dwellings, which have seen some significant falls over recent months (Figure 17).</li><li>With H1 building code changes having pulled forward a number of consent applications, we expect residential consents to decline further over the balance of the year. </li></ul>

Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38% below the February 2022 peak.The decline was largely in higher density dwellings, which have seen some significant falls over recent months (Figure 17).With H1 building code changes having pulled forward a number of consent applications, we expect residential consents to decline further over the balance of the year. 

Building Sector  - NZ Consents — Continued Declines

<ul><li>Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.</li><li>NZ materials demand has softened more than expected but Australian margin gains made in 2H23 are holding, and the volume of homes sold has remained relatively robust.</li><li>Work out of legacy projects will impact 1H24 cash flow. While project provisions were unchanged, FBU highlighted downside risks from insurance and claims settlements. </li></ul>

Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.NZ materials demand has softened more than expected but Australian margin gains made in 2H23 are holding, and the volume of homes sold has remained relatively robust.Work out of legacy projects will impact 1H24 cash flow. While project provisions were unchanged, FBU highlighted downside risks from insurance and claims settlements. 

Fletcher Building - Mixed 1H24 Trading Update

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fletcher Building (FBU NZ)

Fletcher Building - NZICC Steels More Cash

Fletcher Building (FBU) has added a further NZ$180m of provisions in its construction division, largely relating to the NZ International...

Forsyth Barr

Building Sector - NZ Consents — A Year in Decline

After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.

Forsyth Barr

Building Sector - Ready-Mix Concrete — Set in Its Way

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior...

Forsyth Barr

Building Sector - NZ Consents — Continued Declines

Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38%...

Forsyth Barr

Fletcher Building - Mixed 1H24 Trading Update

Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)