FBU - Fletcher Building

[mani99]

Hi all,

First post on the forum so apologies if I haven't included all the details that I should do.

Does anyone hold FBU or thinking about investing? This is one that I'm looking into and the fundamentals look good to me (good income vs value, low debt etc). I just wanted to get the thoughts of the more seasoned investor.

Thanks!

[RTM]

Hi all,

First post on the forum so apologies if I haven't included all the details that I should do.

Does anyone hold FBU or thinking about investing? This is one that I'm looking into and the fundamentals look good to me (good income vs value, low debt etc). I just wanted to get the thoughts of the more seasoned investor.

Thanks!

http://www.sharetrader.co.nz/showthread.php?5170-FBU-Chart&p=633881&highlight=FBU#post633881
You might like to start by having a look at this thread. I have them, but at a lot lower price than they are now.
Not sure I would buy at today's price.

[mani99]

http://www.sharetrader.co.nz/showthread.php?5170-FBU-Chart&p=633881&highlight=FBU#post633881
You might like to start by having a look at this thread. I have them, but at a lot lower price than they are now.
Not sure I would buy at today's price.



Thanks for the link. I couldn't find any posts for FBU (the search did not bring up anything) but that thread is a great place for me to start.

[whatsup]

Why the selling now I thought that all the bad news was out, is there more that we don't know about?

[whatsup]

$7-42 and heading whatsup (again ) !!

[sb9]

https://nzx.com/companies/FBU/announcements/304262

Further profit downgrade and more importantly Mr Adamson leaves the company...kinda written on wall, wasn't it...

[hardt]

From an original forecast 6 months ago of 740m down 30%+ to 525m....

Surely this could move MPG/STU too.

[stoploss]

Hardt as I read it the downgrade in profit is due to the building and interior division suffering some big losses on projects .
Most of the divisions are trading at expected levels .... so don't think this has anything to do with cyclical nature of the company ....

[JoeGrogan]

From an original forecast 6 months ago of 740m down 30%+ to 525m....

Surely this could move MPG/STU too.

Man what a stitch up, think i will be staying away from the construction sector for foreseeable future.

[winner69]

I reckon keep the sad story going on the long serving FBU thread

That way we won't forget what a dog if a company FBU has been

Might be a good time to start punting again

http://www.sharetrader.co.nz/showthread.php?5170-FBU-Chart

[Yoda]

Even ASB securities have stopped following it.

[peat]

Even ASB securities have stopped following it.

I almost commented yesterday on the fact that Philip Capital also stopped covering FBU
9001
(Note graphic is using AUD)

[basilcat]

I almost commented yesterday on the fact that Philip Capital also stopped covering FBU
9001
(Note graphic is using AUD)

This company's management is a problem. I have been in construction for nearly 50 years. As I observe their various work sites the lack of expertise and construction skills are obvious. They have appointed a person with no experience in the discipline as head of the division. She has a BA like the previous CEO and he also had a BA and has left with another sort of BA. It like an engineer being sent to critic the performance of a surgeon. Also who on the board has any expertise in construction? The sinecure they once had as the dominant construction company is also now gone. Vinci the largest construction company in the world, and who own HEB, March Construction and Electrix, is the JV partner with Downers on the Auckland rail system. Until managers with the required experience are appointed I would not be too optimistic. The likes of Downers, Fulton Hogan etc all have experience construction men running their operations. Invest in Fletchers if you wish but be aware of the risks posed by such.

[bull....]

This company's management is a problem. I have been in construction for nearly 50 years. As I observe their various work sites the lack of expertise and construction skills are obvious. They have appointed a person with no experience in the discipline as head of the division. She has a BA like the previous CEO and he also had a BA and has left with another sort of BA. It like an engineer being sent to critic the performance of a surgeon. Also who on the board has any expertise in construction? The sinecure they once had as the dominant construction company is also now gone. Vinci the largest construction company in the world, and who own HEB, March Construction and Electrix, is the JV partner with Downers on the Auckland rail system. Until managers with the required experience are appointed I would not be too optimistic. The likes of Downers, Fulton Hogan etc all have experience construction men running their operations. Invest in Fletchers if you wish but be aware of the risks posed by such.

here what ya say I reckon ever since they did away with the apprenticeship system the country has lost alot of its skill base, now we have a lot of clowns coming out of polytech.

anyway fbu loss more money on delays

https://www.stuff.co.nz/business/95465127/incorrect-steel-delays-christchurch-airport-hotel-opening

[hogiela]

here what ya say I reckon ever since they did away with the apprenticeship system the country has lost alot of its skill base, now we have a lot of clowns coming out of polytech.

anyway fbu loss more money on delays

https://www.stuff.co.nz/business/95465127/incorrect-steel-delays-christchurch-airport-hotel-opening



OMG FBU ... what are you doing?!!!?

[RTM]

OMG FBU ... what are you doing?!!!?

Mine have all gone...was surprised when they went up after I sold.

[winner69]

FBU a pretty popular pick in the competition this

Many, including some illuminiaries, obviously think could be a decent turnaround story

Don’t forget the share price was once close to $14 so even if it only goes to $10 it’s only going to where it’s been before.

[Leftfield]

FBU a pretty popular pick in the competition this

Many, including some illuminiaries, obviously think could be a decent turnaround story

Don’t forget the share price was once close to $14 so even if it only goes to $10 it’s only going to where it’s been before.

Agree there is upside potential, however IMO there is still considerable downside risk if there is any more bad news.

Given the downside risk I won't be touching until there is some good turnaround news/evidence and a more established rising trend. It will be an interesting one to watch in 2018, but I'll remain on the sidelines. GLH.

[macduffy]

Is there an element of "everything else has run too hard " in picking FBU to perform strongly this year? I'm another who'll wait to see some evidence first.

[Beagle]

Agree there is upside potential, however IMO there is still considerable downside risk if there is any more bad news.

Given the downside risk I won't be touching until there is some good turnaround news/evidence and a more established rising trend. It will be an interesting one to watch in 2018, but I'll remain on the sidelines. GLH.


Is there an element of "everything else has run too hard " in picking FBU to perform strongly this year? I'm another who'll wait to see some evidence first.

Agree 100%.

[macduffy]

Carillon's problems in the UK read rather like an extreme version of FBU's here. From the Guardian:

https://www.theguardian.com/business/2018/jan/15/carillion-what-went-wrong-liquidation-staff

[Balance]

NBR headline a few days ago :

"Spanish company eyes Fletcher's Construction Division"

No denials or rebuttal so far?

[Balance]

https://www.nzx.com/announcements/313873

More material losses from B&I

[bull....]

huge falls in loss of confidence for this stock , nice timing announcement right at the top of the declining trendline ..... big fall today

[percy]

https://www.nzx.com/announcements/313873

More material losses from B&I

Fun watching from the sidelines.!

[Balance]

huge falls in loss of confidence for this stock , nice timing announcement right at the top of the declining trendline ..... big fall today

Trading halt until Monday so no action until then.

This is the third downgrade so the old adage that downgrades come in threes really do happen!

[winner69]

NBR headline a few days ago :

"Spanish company eyes Fletcher's Construction Division"

No denials or rebuttal so far?

Maybe the Spaniards watching closely ......even cheaper entry now if they are keen

https://www.nzx.com/announcements/313880

[Biscuit]

Used to be a good company, one I traded quite a lot years ago. Sad to see it so thoroughly lose the plot over the last several years or so.

[JeremyALD]

Used to be a good company, one I traded quite a lot years ago. Sad to see it so thoroughly lose the plot over the last several years or so.

How on earth shareholder's have been so forgiving is beyond me. There have been multiple downgrades and the SP is not much lower than it was a couple years ago.

[blackcap]

Used to be a good company, one I traded quite a lot years ago. Sad to see it so thoroughly lose the plot over the last several years or so.

You would think that Ralph's position has become untenable. However with this company anything goes seems to be the motto.....

[winner69]

Breach of banking convenants a bit embarrassing isn’t it .....for one of NZs biggest companies

Jacinda should nationalise it and turn it into Kiwi Build.

[winner69]

FBU had about $2billion of debt last accounts and proudly got another $345m from their bankers a few months ago

[Dassets]

Capital raise likely. Say $500M. Rest of market will be sold to raise the cash. Very ugly. The old saying there is always more than one cockroach in the cupboard very apt. The board now must have a cleanout after a very average performance.

[Beagle]

Not sure what happened to the original FBU thread but in that I commented several times on the likelihood of losses extending far beyond the scope of those identified in the original write-down and suggested there were systemic problems in the construction division.

I was discussing this with an investor the other day and my comment was really its truly remarkable that a company that over many decades has operated in the large project construction business and is supposed to have really huge amounts of expertise in that area could get things so badly wrong with its current projects.

Its quite an "accomplishment" for example to tender for the Sky City Convention center project at just over $400m and then go on to lose over $200m on that project isn't it !
As I commented before, where there's smoke there's fire. If they are so incredibly incompetent in that project there will be systemic incompetency's throughout that division in a wide range of other projects.

How could things go so incredibly wrong for a company with many decades experience on a vast array of large construction projects ? Is it time to shut that division down completely ? Time for more heads to roll at a board and management level ? There was widespread derision towards FBU at last February's Auckland ST meeting which seems with hindsight to have been very well founded.

I am not sure why so many analysts love this stock and have been so forgiving of their systemic underperformance ?
I suggested many months ago that I could see no reason why this stock should trade above $5. Mark my words, whatever problems they identify in the current review will not be the end of the problems within that division.

[Sideshow Bob]

It must be real real tough when their key market has a major building downturn, no construction of big projects, no subdivisions, no population growth, no natural disasters requiring rebuilds.......oh hang on, wait a moment.......

[Balance]

How could things go so incredibly wrong for a company with many decades experience on a vast array of large construction projects ? Is it time to shut that division down completely ?
Time for more heads to roll at a board and management level ?

Change in CEO and an exodus of key experienced staff - that's the long and short of it.

[minimoke]

FBU had about $2billion of debt last accounts and proudly got another $345m from their bankers a few months ago
In its day Air NZ needed around $885m which Labour coughed up

Labour paid $690 for NZ Rail

Back in the day Labour (or Big Jim) pumped $123m to set up Kiwibank.

A residential property company seems within the bounds of possibility.

[Beagle]

In its day Air NZ needed around $885m which Labour coughed up

Labour paid $690 for NZ Rail

Back in the day Labour (or Big Jim) pumped $123m to set up Kiwibank.

A residential property company seems within the bounds of possibility.

I agree. I think the board need to urgently cease any future major construction projects and concentrate on building houses and look to flick off that division ASAP.

[Balance]

I agree. I think the board need to urgently cease any future major construction projects and concentrate on building houses and look to flick off that division ASAP.

Hence, the discussions with potential buyers as alerted to by NBR a few days ago?

Personally I think it will be hell of a pity for Fletcher to be further broken up and down-sized but the Board really needs to find a solution to this bleeding.

[Dassets]

54 people on over $500000 per annum. Time for staff to share the pain

[macduffy]

I agree. I think the board need to urgently cease any future major construction projects and concentrate on building houses and look to flick off that division ASAP.

Back to the days of major construction projects given to overseas firms - with a minor jv role for local companies?

:mellow:

[minimoke]

Back to the days of major construction projects given to overseas firms - with a minor jv role for local companies?

:mellow:
Or go further back. What was it called. Ministry of Works?

[peat]

yes quite clear that this was a distinct possibilty, but still shocked that it actually has occurred kinda like a cliche
Isnt this the third time now that they've cleaned out the woodwork? but its just riddled with worm...
Soon there will be a lot of people looking for a bargain with this one.
Don't.

[Beagle]

54 people on over $500000 per annum. Time for staff to share the pain

All I see is gross incompetence right across the board. What a joke with so many people on over $500,000 !
It'll take years to dig themselves out of the doggy doo with all their fixed price contracts still to be completed.
That division is like having wood rot in your home...the more you investigate, the deeper you dig, the more problems you find. Whoever thinks that all their problems will finally disclosed to the market in that division by Monday morning is kidding themselves. Nobody knows how deep the rot goes in that division. I suspect the left hand hasn't got the slightest clue what the right hand is doing inside that company.

[Raz]

All I see is gross incompetence right across the board. What a joke with so many people on over $500,000 !
It'll take years to dig themselves out of the doggy doo with all their fixed price contracts still to be completed.
That division is like having wood rot in your home...the more you investigate, the deeper you dig, the more problems you find. Whoever thinks that all their problems will finally disclosed to the market in that division by Monday morning is kidding themselves. Nobody knows how deep the rot goes in that division. I suspect the left hand hasn't got the slightest clue what the right hand is doing inside that company.

quality of management is the key...it appears they are sadly lacking...

[bull....]

quality of management is the key...it appears they are sadly lacking...

exactly bring in jenny shipley to sort the mess out

[hogie]

Wtf ... just when you thought the worst was over ...

FBU is the only stock i've ever regretted buying ... and I was stupid enough to re-buy twice because I thought there was no way a company like FBU could do poorly in the booming NZ economy ... grr

[Balance]

Wtf ... just when you thought the worst was over ...

FBU is the only stock i've ever regretted buying ... and I was stupid enough to re-buy twice because I thought there was no way a company like FBU could do poorly in the booming NZ economy ... grr

It's ok - you could have bought MPG or CBL?

[bull....]

Yup. She fixed Mainzeal, real good.

hahhaa exactly couldnt be any worse a

[Beagle]

quality of management is the key...it appears they are sadly lacking...

Exactly...and who is to blame for that, the board for not keeping proper checks and balances on the previous CEO.

[peat]

must be quite gut churning for a lot of retail shareholders and the situation of waiting till Monday to hear any news.

[winner69]

must be quite gut churning for a lot of retail shareholders and the situation of waiting till Monday to hear any news.

And how many hundreds of millions in KiwiSaver and super funds seeing they have large chunk of the NZX market cap.

[whatsup]

and I note that FBU is trading at a p e of 57+ when considering its history and its business sector it should be at 18-20 p e which should reflect in its s p of circa $2.25 - $2.75 !!

[winner69]

Fletcher unlikely to fail

https://www.stuff.co.nz/business/101251147/fletcher-building-board-expects-more-bi-losses

[Kay]

No surprises. Not sure there's any management change that can fix a losing construction project (maybe a good lawyer). But sounds like when they identify a loss they cannot control the rate of loss which is pretty useless. Lost count of how many (allegedly) underperforming projects they have on the books.

I'd be interested in how commercial bay is doing. Although KPMG reported it is performing in line with FBs expectations.......

[couta1]

54 people on over $500000 per annum. Time for staff to share the pain That's disgraceful and immoral, on the same level as the CEO of Tegal getting near 4 million, except on a larger scale.

[Kay]

That's disgraceful and immoral, on the same level as the CEO of Tegal getting near 4 million, except on a larger scale.

Surely that's 54 in Fletcher Building rather than 54 in Fletcher building and interiors?Not too bad considering the size of the company and business units... Most of which are very successful.

[Beagle]

and I note that FBU is trading at a p e of 57+ when considering its history and its business sector it should be at 18-20 p e which should reflect in its s p of circa $2.25 - $2.75 !!

That included some "one off" provisioning last year...which looks to be a recurring thing. I tried to value them on the basis of their assertion it was a one off and based on an across the cycle PE of 10 for a cyclical company, 7 at the peak of the construction cycle like we are now I arrived at $5 many months ago. Obviously now its clear that losses within the B & I division will be ongoing for quite some years so I would tend to see fair value at well under $5 now. I have no idea how the professional analysts have arrived at some of their fancy theoretical valuations some as high as over $9 but the fact is they've been proven wrong and my own assessment of value made me stay out which has proved correct. I think it takes 5+ years to clean up this mess and see FBU as a systemic underperformer going forward.

[couta1]

Surely that's 54 in Fletcher Building rather than 54 in Fletcher building and interiors?Not too bad considering the size of the company and business units... Most of which are very successful. I'd like to see the job descriptions of those 54, I bet many of them do no more and have no more responsibility than the village manager of a large 400 resident retirement facility, who are on around 100k.

[Balance]

Watched TV1 tonight and the glee with which Milford talked down FBU - the stock is an absolute BUY on MOnday should it drop $2.00 to say, $5.75.

Means Milford is out and like with Diligent, is getting ready to buy back in imo.

[bull....]

be no dividend if they have to raise money , if they have to sell an asset to cover losses mean the companies worth less as well , imagine they have to pay consultants to do a strategic review now as well.

maybe they could float the divisions on the nzx and remain majority owners as a way to raise cash.

[Valuegrowth]

If I am correct, their losses were largely ascribed to following two projects.

· Sky City Convention Centre
· The Justice Precinct in Christchurch

How did they lose money on those projects?

https://simplywall.st/stocks/nz/materials/nzx-fbu/fletcher-building-shares/news/with-a-recent-roe-of-2-88-can-fletcher-building-limited-nzefbu-catch-up-to-its-industry/

In my view currently it is overvalued. Although it has a long term business model it will take some time to recover. It may have some short term support in the current bull market but when bear set it also may have a hit unless they perform well in the long run.

[Ggcc]

If I am correct, their losses were largely ascribed to following two projects.

· Sky City Convention Centre
· The Justice Precinct in Christchurch

How did they lose money on those projects?

https://simplywall.st/stocks/nz/materials/nzx-fbu/fletcher-building-shares/news/with-a-recent-roe-of-2-88-can-fletcher-building-limited-nzefbu-catch-up-to-its-industry/

In my view currently it is overvalued. Although it has a long term business model it will take some time to recover. It may have some short term support in the current bull market but when bear set it also may have a hit unless they perform well in the long run.

I built a business from empty space and I definitely underestimated the cost of tradies and equipment. My budget was blown by 25% and I had to scale back spending on certain products to meet that. I can imagine with the big jobs there will be budget blowouts

[trader_jackson]

be no dividend if they have to raise money , if they have to sell an asset to cover losses mean the companies worth less as well , imagine they have to pay consultants to do a strategic review now as well.

maybe they could float the divisions on the nzx and remain majority owners as a way to raise cash.

Their will be no dividend if they have breached covenants full stop I would have thought...

Marketwinner, I think this is further losses on other projects as well, such as that flash new downtown Auckland building.

http://www.afr.com/street-talk/fletcher-building-pitchbooks-fly-20170417-gvm3uv
Seems a division sell off could be 'more possible'
That building products division is probably going along way in keeping Fletcher afloat... so at least it won't be a Carillion v2

Interesting to watch

[bull....]

Their will be no dividend if they have breached covenants full stop I would have thought...

Marketwinner, I think this is further losses on other projects as well, such as that flash new downtown Auckland building.

http://www.afr.com/street-talk/fletcher-building-pitchbooks-fly-20170417-gvm3uv
Seems a division sell off could be 'more possible'
That building products division is probably going along way in keeping Fletcher afloat... so at least it won't be a Carillion v2

Interesting to watch

read it sounds like typical investment bankers trying there luck for a deal but at the end of article afr say really who would want it at the top of the cycle?

[Valuegrowth]

Thanks. Hope It won’t be like Mainzeal. I am pretty sure It won't go into receivership and liquidation but better to be cautious. It is not too big to fall. I would like to do some research on this company.

[Kay]

I'd like to see the job descriptions of those 54, I bet many of them do no more and have no more responsibility than the village manager of a large 400 resident retirement facility, who are on around 100k.

Well I am not saying they are all worth it (wouldn't have a clue). But good to put the number 54 into context as there must be 30ish companies/units under the Fletcher umbrella. All each handling maybe 7, 8, 9 figures of revenue etc and for all I know performing well and very far separated from the murky world of Fletcher building and interiors....unless the problem runs deeper of course!

[value_investor]

What I don't understand is how after the last earnings downgrade, the stock fell from close to $8, down to below $7 and then back to $8. It literally went up in value after a profit downgrade. This would be understandable if the company was a good one. Like the company had strong fundamentals, or good management, or they were in a stable environment but FBU aren't!

This movement is ridiculous. How can a stock with 3 profit downgrades in a year be trading at such a strong multiple. Is there too much emotion about FBU out there? Perhaps a lot of older folks putting money into it. Or is this just the bull market?

[Beagle]

Watched TV1 tonight and the glee with which Milford talked down FBU - the stock is an absolute BUY on MOnday should it drop $2.00 to say, $5.75.

Means Milford is out and like with Diligent, is getting ready to buy back in imo.

If someone offered me 10,000 shares in SUM or 20,000 shares in FBU and they were to be held in trust for me for 10 years and I couldn't touch them I'd choose SUM in a nanosecond despite the present value being well under half of the FBU choice. FBU has been a perennial underperformer for the last decade and is red hot favorite to continue in the same way in my opinion. The point of my illustration is to raise the question of, over time, why bother at any price when there are so many proven performers out there that will grow your capital ? I'd even take 20,000 AIR shares even though they're also cyclical and less than half the price instead of 20,000 FBU shares in that scenario as over time good quality management work for shareholders interests whereas poor quality managers work against shareholder interests.

[macduffy]

be no dividend if they have to raise money , if they have to sell an asset to cover losses mean the companies worth less as well , imagine they have to pay consultants to do a strategic review now as well.

maybe they could float the divisions on the nzx and remain majority owners as a way to raise cash.

Yes, a breakup of the company and listing of the divisions separately is looking more and more likely now. Rather like the split of Fletcher Challenge into FBU, Fletcher Energy, Fletcher Paper, Wrightson many years ago.

[JeremyALD]

What I don't understand is how after the last earnings downgrade, the stock fell from close to $8, down to below $7 and then back to $8. It literally went up in value after a profit downgrade. This would be understandable if the company was a good one. Like the company had strong fundamentals, or good management, or they were in a stable environment but FBU aren't!

This movement is ridiculous. How can a stock with 3 profit downgrades in a year be trading at such a strong multiple. Is there too much emotion about FBU out there? Perhaps a lot of older folks putting money into it. Or is this just the bull market?

THIS. It has actually gone up in value after its latest downgrades. I mentioned this after their 2nd downgrade and since then they have had two more and are still trading above $7.50.

Meanwhile MPG SP has been slaughtered and shown no mercy after seemingly less severe downgrades. It now is on a PE of less than 9

[Kay]

I wonder if Ralph norris will survive...he surpassed dreadful a while ago... Surely he's earnt enough now to politely extremity off...

[Beagle]

THIS. It has actually gone up in value after its latest downgrades. I mentioned this after their 2nd downgrade and since then they have had two more and are still trading above $7.50.

Meanwhile MPG SP has been slaughtered and shown no mercy after seemingly less severe downgrades. It now is on a PE of less than 9

I agree its absolutely ridiculous. Someone listened into the conference call, (sorry forgot who) and said analysts were like pet pussy cats with management or words to that effect. too scared to ask searching questions. FCNZ put out a research note after the most recent downgrade many months back calling fair value at what I considered an absurd amount of $9.20 from memory. On the other hand I opinioned how I couldn't see any reason why anyone would pay more than $5 and went on to say at that time this wouldn't be the last write-down in that division by any stretch of the imagination.
Sometimes I thank God that he gave me a good brain so I can do my own analysis rather than relying on these "professionals"...the same ones who reckoned AIR was worth only $2.10 this time last year. I should probably thank him more often.
Whatever figure they come out with as a write-down on Monday will not be the end of it, itll just be their most recent guess of the amount of wood rot in the wood pile.
We can really "rely" on their latest write-down guess can't we...because their other guesses have been so full and final and so "accurate" lol.
What a sad and pathetic situation.

[winner69]

Beagle - in a round about way even you (and me) probably “own” quite a few FBU shares

Good eh

[Beagle]

I run my own super scheme mate, (like to be in control of my own destiny at least that part of it I can control) and at present don't own any ETF's or stakes in managed funds in N.Z. so I am proud to say I don't have a single FBU share either directly or indirectly and that's extremely unlikely to change anytime soon !

[winner69]

I run my own super scheme mate, (like to be in control of my own destiny at least that part of it I can control) and at present don't own any ETF's or stakes in managed funds in N.Z. so I am proud to say I don't have a single FBU share either directly or indirectly and that's extremely unlikely to change anytime soon !

The Queen owns quite a few on your behalf .... and no doubt ACC have heaps

[peat]

The Queen owns quite a few on your behalf .... and no doubt ACC have heaps

ACC I understand but how does the Queen own any on our behalf?

[winner69]

ACC I understand but how does the Queen own any on our behalf?

New Zealand Superannuation Fund Nominees Limited as nominee for the New Zealand Superannuation Fund being property of Her Majesty the Queen in right of New Zealand and managed and administered by the Guardians of New Zealand Superannuation (“NZSF”)

[peat]

Yes yes of course
I thought they were in Michael Cullens name ! :p

Or Orr :p

According to Dec report they have 93.5Million worth.

[Beagle]

Okay, got ya mate...I'm sad now, thanks for ruining my day even more lol

[Lawstudent05]

Anyone want to pick the share price close of business on the 21st?

[minimoke]

Anyone want to pick the share price close of business on the 21st?
I'll have a go: $6.10

[Beagle]

Do you mean the 12th Feb ? If so I'll speculate it'll only fall by about 10%...should be a LOT more though.

[peat]

No one has mentioned how well the FBU share price is holding up?


:p

[minimoke]

No one has mentioned how well the FBU share price is holding up?


:pAssume this is helping to prop up the Index today.

[steveb]

Do you mean the 12th Feb ? If so I'll speculate it'll only fall by about 10%...should be a LOT more though.
we are still waiting on the show and tell from management,at this stage I would not like to pick,but the news could be worse or even better than the markets expect

[rmnz]

If I am correct, their losses were largely ascribed to following two projects.

· Sky City Convention Centre
· The Justice Precinct in Christchurch

How did they lose money on those projects?

https://simplywall.st/stocks/nz/materials/nzx-fbu/fletcher-building-shares/news/with-a-recent-roe-of-2-88-can-fletcher-building-limited-nzefbu-catch-up-to-its-industry/

In my view currently it is overvalued. Although it has a long term business model it will take some time to recover. It may have some short term support in the current bull market but when bear set it also may have a hit unless they perform well in the long run.


I heard from someone at SKC that the higher ups were worried about FBU's ability to deliver on the contract but were given endless reassurances it would be met. Apparently it was/is a common practice to under bid to win the bid then look to renegotiate terms and penalties later relying on the pally pally approach.

[Baa_Baa]

Assume this is helping to prop up the Index today.

Prices generally hold up well in a trading halt. 😳

[winner69]

Not much of a yield on the listed Fletcher Notes - about 4.30%

Safe as houses

[Under Surveillance]

I'll have a go: $6.10
I reckon lower. It was around 670 after the second downgrade. Logically it would fall below that. This time there are uncertainties as to, say, fire sales and/or capital raisings to mollify the bankers. To top all the self-inflicted problems facing FBU there is now weak general market sentiment.

So, somewhere in the 500s, ..... I'll go for 559. But I wouldn't touch them at 459.

[Filthy]

Apparently it was/is a common practice to under bid to win the bid then look to renegotiate terms and penalties later relying on the pally pally approach.

yes. it wasn’t long ago that construction & fitout margins used to be a ‘healthy’ 6-10% depending on project value

now, common industry practice is to ‘go in cheap’ off the plans at say a 1-2% margin, then hope like d*ck that the Client changes their mind as they progress through the build and ping them 20-30% on any of the variations to make-up your lost margin

if the Client makes little or no changes, then you end up with ‘a lot of turnover’ for ‘not a lot of reward’ and you only need one subbie to stuff-up, something not to be delivered to site on-time or your PM to make a wrong calculation and then your suddenly working the job at a loss

consultants bringing out damage-lead contracts (which started to become really popular 10 years ago) that screw the builder over if they do not meet the construction program have not helped the industry at all

very sad to see what was once a very proud construction company in such a sorry state

until the industry changes the way it operates, there is always going to be that added risk to the builder

there is certainly some underlying value to be unlocked at Fletchers, but there is still perhaps a lot of pain to go through to get it…..

I hope things improve for holders & glad it did not hit my target price of 6 bucks back in Nov!





filthy

[macduffy]

I'll have a go: $6.10

Depends what the announcement will say. Any mention of separation and listing of the various business units may encourage interest in the stock.

[Beagle]

I reckon lower. It was around 670 after the second downgrade. Logically it would fall below that. This time there are uncertainties as to, say, fire sales and/or capital raisings to mollify the bankers. To top all the self-inflicted problems facing FBU there is now weak general market sentiment.

So, somewhere in the 500s, ..... I'll go for 559. But I wouldn't touch them at 459.

Agreed...I'm getting that feeling we need a poll for this one...could be a bit of fun

[minimoke]

Depends what the announcement will say. Any mention of separation and listing of the various business units may encourage interest in the stock.I think such an announcement would be premature. Though inevitable

[Filthy]

I'll have a go: $6.10

I am picking high-fives (no pun intended)....


glad it did not hit my target price of 6 bucks back in Nov!

new target price significantly reduced now and plenty of other bargains around that would take priority anyway!




filthy

[peat]

Not much of a yield on the listed Fletcher Notes - about 4.30%

Safe as houses
I took a look at those yesterday, I couldnt see anything indicating a sell off (yields rising)

[Beagle]

It would appear that FBU notes are also on a trading halt.

[bullfrog]

Anybody following the collapse of Carillion, a 2bn company that issued a profit warning in July, highlighted contracts were losing money, now in liquidation. Not saying that FBU will end up the same, but I think Carillion got too big to manage, too many disparate elements that a centralised mnagement structure could not control. If, and it's a big if, that's what happened, certain similarities with FBU?


https://www.stuff.co.nz/business/world/100604772/crisi****-uk-construction-giant-carillion-goes-into-liquidation

[Marilyn Munroe]

I have a few carats worth on March 2015 capital notes and have received an election notice giving me the option to roll over or convert.

Fletcher's have have chosen to cash out those who elect to convert;

"FBI will have a nominee purchase for cash all those capital notes which note holders wish to convert. No shares will be issued following an election to convert capital notes."

I will be paying close attention to Mondays announcement. My instinct is to convert for cash. I don't relish being in the creditors queue behind banks when an outfit is in breach of banking covenants.

I am surprised a company under stress is enabling capital note holders who are owed $100 mil to take the money and run if they choose.

Boop boop de do
Marilyn

[macduffy]

Neither would they want an uncertain degree/amount of conversion to shares with the prospect of an equity raising around? Would complicate negotiations with instos and/or terms of a prorata cash issue or a share purchase plan offer.They probably expect a reasonable degree of re-investment considering the lack of alternative fixed interest options at present.

[Scrunch]

Trading halt extended to wednesday

[peat]

cant even keep to their own self imposed timetable. <shudder>

[bull....]

must still be working with the banks - must be big loss?

[percy]

A good one foe one at five dollars should get the banks back onside.

[Beagle]

cant even keep to their own self imposed timetable. <shudder>

That really is pathetic. Capital raise coming ?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11992576

[percy]

Ex banker Ralph Norris will not enjoy being on the other side of the table,talking to the present day bankers.

[Under Surveillance]

Ex banker Ralph Norris will not enjoy being on the other side of the table,talking to the present day bankers.
More likely he's under the table, licking their ........ boots

[percy]

More likely he's under the table, licking their ........ boots

LOL.Made my day.!

[winner69]

Good article

https://www.stuff.co.nz/business/101398374/fletcher-building-suffered-billions-in-wealth-loss

Not many analysts / investors worry about measuring profits over the cost of capital leaving it to academics and real finance analysts

EVA (economic Value Added) is worthwhile understanding even if it leads to knowing that MVA is the NPV of future Economic Profit. MVA being Market Value Added and is the difference between a company’s Market Cap and Shareholder Equity. Cool eh

[Beagle]

Great article and some very interesting comments from readers below it. My favourite

It boils down to a sick company culture of arrogance and fear. I'm sure there are people who know what going on but you simply don't disagree with your bosses. Sadly this filters down to the mid managers who don't heed good advice they receive from suppliers. It needs a total wipe-out of the top management.

[Ggcc]

Good article

https://www.stuff.co.nz/business/101398374/fletcher-building-suffered-billions-in-wealth-loss

Not many analysts / investors worry about measuring profits over the cost of capital leaving it to academics and real finance analysts

EVA (economic Value Added) is worthwhile understanding even if it leads to knowing that MVA is the NPV of future Economic Profit. MVA being Market Value Added and is the difference between a company’s Market Cap and Shareholder Equity. Cool eh


Quite interesting as one person wrote.

“I worked for Fletchers three times for the total of 25 years .And I never thought the day would come that Fletchers would end up in a mess that it is wright now . One board member said to me once that? To many Suites have got control of Fletchers ( meaning accountants) And he could see the downward slide of the company coming soon. He said that 20 years back .Sir James won't be turning he will be spinning.”

The accountants I have met or invested in have been great at keeping the books in check, but could not run a business to save themselves only the ones I’ve met

[lawson]

Great article and some very interesting comments from readers below it. My favourite

I have a good friend who works for Fletcher Building and he describes it a little differently but it boils down to the same thing - a sick culture but of relentless positivity rather than arrogance, where everyone is busy saying everything is great and wonderful and if you point out something is a bad idea or won't work or is flawed then you're "negative" and your career is all but over if you get the "negative" label applied so you just sit through bad decisions and bad ideas going - great!!

[winner69]

Only a few months ago -


Auckland, 08 September 2017 – Fletcher Building announces that it has arranged additional debt facilities of NZ$345 million with three banks from its existing Syndicate; ANZ, HSBC and Westpac Bank.

The debt facilities have been put in place in line with Fletcher Building’s scheduled refinancing program, and will allow the company to work with its lenders to access longer term funding solutions.

“We are very pleased to have put these facilities in place, which show the continued support we have from our lenders", commented Fletcher Building's Chief Financial Officer Bevan McKenzie, "Fletcher Building has a strong funding profile and will continue to work with our lenders to maintain our diverse sources of debt funding."
Ends

Wonder how the continued support is going

[minimoke]

Wonder how the continued support is goingWonder what numbers they were given in the first place to get that continued support.

[winner69]

Wonder what numbers they were given in the first place to get that continued support.

You have to think that they were quite bullish

Interesting full announcements said a few times that their debt/equity ratio was a bit low and they needed to borrow more

[artemis]

I have a good friend who works for Fletcher Building and he describes it a little differently but it boils down to the same thing - a sick culture but of relentless positivity rather than arrogance, where everyone is busy saying everything is great and wonderful and if you point out something is a bad idea or won't work or is flawed then you're "negative" and your career is all but over if you get the "negative" label applied so you just sit through bad decisions and bad ideas going - great!!

I've worked for large corporates, NZ and global. There are always disaffected individuals who say much the same thing. The corporate environment just is not a good fit for some people, and they either move on or turn into the bad apple in the barrel if no other employer wants them.

Not saying there are not poor, bad or toxic managers - God knows - but if I heard employees saying stuff like that I would expect to find a very average employee with no future advancement on the horizon.

Some bosses can't cope with disagreements or criticisms, but most can if they already trust the criticiser. It's about managing upwards. And not whinging.

[Beagle]

Only a few months ago -


Auckland, 08 September 2017 – Fletcher Building announces that it has arranged additional debt facilities of NZ$345 million with three banks from its existing Syndicate; ANZ, HSBC and Westpac Bank.

The debt facilities have been put in place in line with Fletcher Building’s scheduled refinancing program, and will allow the company to work with its lenders to access longer term funding solutions. [/B]

“We are very pleased to have put these facilities in place, which show the continued support we have from our lenders", commented Fletcher Building's Chief Financial Officer Bevan McKenzie, "Fletcher Building has a strong funding profile and will continue to work with our lenders to maintain our diverse sources of debt funding."
Ends

Wonder how the continued support is going

That bit would be a bit concerning to me if I was a shareholder. Obviously they've been working on finding longer term debt facilities when times were better. How are they going to get on now bearing in mind they hired outside consultants for a so called rigorous evaluation of the degree of problems late last year ?
If I was a banker I'd be most underwhelmed with this ongoing fiasco, now into its second year and third so called thorough evaluation. As a banker making a decision on this I don't think its unreasonable to expect an even more rigorous forensic audit of these problematic projects by a different major accounting firm than the one used last year. That sort of forensic analysis thing doesn't happen overnight. Another trading halt extension coming ? My mind wanders and wonders about the veracity of their internal accounting systems. Very weak internal controls ?

[Beagle]

I have a good friend who works for Fletcher Building and he describes it a little differently but it boils down to the same thing - a sick culture but of relentless positivity rather than arrogance, where everyone is busy saying everything is great and wonderful and if you point out something is a bad idea or won't work or is flawed then you're "negative" and your career is all but over if you get the "negative" label applied so you just sit through bad decisions and bad ideas going - great!!

You're either a career person or not within big companies, you either "buy" the company line, hook, line and sinker, or you'll get nowhere. I agree there's no in between's if you want to climb the corporate ladder. I suspect that's the real nub of the issue with Fletcher's. Too many career climbers looking to get to comfortable over $500K salaried positions of which there are several dozen within the group.

Relentless positivity...hmmm wasn't a certain politician elected recently on that mantra ! No doubt many of us will get sick of her telling us how well N.Z. Inc is doing in the not to distant future !

[lissica]

Relentless positivity...hmmm wasn't a certain politician elected recently on that mantra ! No doubt many of us will get sick of her telling us how well N.Z. Inc is doing in the not to distant future !

Or simply a case of cognitive dissonance.

We were told by a 'relentlessly positive' politician that we lived in a country where everything was in 'crisis'. So yes, one can be relentlessly, positive about the sky falling.

[winner69]

If FBU collapses in a heap could be good for other stocks

FBU weighting in indices falls ...index trackers need to buy more of the other stocks as their weighting adjusted up

Is this how it works?

[winner69]

Incredible ...another 1/2 billion bites the dust ...betcha this just ain’t happened

Words fail me

Normalized Profit will be pretty good though ...previous guidance confirmed

[winner69]

No capital raise mentioned so I reckon share price down about 10% today

Maybe $7 will be good buying ... but $6.50 would be even better

[hey_homes]

Excuse my ignorance, but why is trading halted in these circumstances? Who makes that decision?

[RTM]

https://www.nzx.com/announcements/314161

[JeremyALD]

Mind boggling. How one can losses be almost tripled from their last comprehensive review?!

[Balance]

Incredible ...another 1/2 billion bits the dust ...betcha this just ain’t happened

Words fail me

Normalized Profit will be pretty good though ...previous guidance confirmed

Breathtaking!

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/314124/274373.pdf

Looks like Sky City has got the bargain of the century - getting a $887m convention centre for $470m?

[JayRiggs]

No dividend for HY2018. Oh dear me. That might kick the share price down another 20c or so.

[winner69]

Wonder if Ralph choked up like Bill did when he wrote this -

Fletcher Building remains a great and solid business. I have every confidence it will weather this storm, and once again deliver our shareholders the value they expect and deserve.

[winner69]

Breathtaking!

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/FBU/314124/274373.pdf

Looks like Sky City has got the bargain of the century - getting a $887m convention centre for $470m?

As long as it doesn’t fall down in a few years time

[minimoke]

Time to look at KPMG. How do they have a $160m loss in October and they now have a $660m los. Thats a lot of numbers they couldn't find a few months ago.

[Balance]

Wonder if Ralph choked up like Bill did when he wrote this -

Fletcher Building remains a great and solid business. I have every confidence it will weather this storm, and once again deliver our shareholders the value they expect and deserve.

https://www.nzx.com/announcements/314161

Ralph Norris falling on his sword.

Bring Ralph Waters back!

[RTM]

No capital raise mentioned so I reckon share price down about 10% today

Maybe $7 will be good buying ... but $6.50 would be even better

In Jan 16 I bought some at 6.74. Can’t see any good reason that they should be above those.
Not holding anymore.

[bull....]

there revenue in construction is over 2 billion , there stopping all bidding for further work on vertical construction , significant hit to revenue going forward i reckon , hence earnings will be less going forward and potentially lower divs , even at 6 i reckon your paying nearly 20x earnings for future yrs

[Dassets]

Disclosure imo not adequate. Blaming sub trades is laughable. Must be a lot of gibbers plumbers and sparkies holidaying in St Moritz and on their superyachts. Reality is they gave fixed price contracts on stuff that wasnt designed. Also any bunny knows digging underground is fraught with danger. Board signed off on a totally crazy strategy. 540 staff on over 500g a year. Take the knife to board and staff and bs costs.

[Filthy]

common industry practice is to ‘go in cheap’ off the plans at say a 1-2% margin, then hope like d*ck that the Client changes their mind as they progress through the build and ping them 20-30% on any of the variations to make-up lost margin <---------> until the industry changes the way it operates, there is always going to be that added risk to the builder

"While the B+I market sector remains characterised by high contract risk and low margins we will no longer participate. If these market dynamics change in the future we would reconsider our position." - well, at least they've agreed with me and have finally seen the light........ hopefully as an industry 'leader' (and I use that term lightly) they can perhaps help force some positive change.




filthy

[minimoke]

there revenue in construction is over 2 billion ,
About 1/4 of FBU revenues

[Dassets]

PS the banks havent waived. They have stayed requiring new terms. If i was the notes guys i would totally screw them on the negotiations. Also my bet is the banks will require an amort of debt going forward. A bitter pill for shareholders

[Antipodean]

Excuse my ignorance, but why is trading halted in these circumstances? Who makes that decision?

https://s3-ap-southeast-2.amazonaws.com/nzx-prod-c84t3un4/comfy/cms/files/files/000/002/619/original/NZX_Main_Board_Rules_-_1_October_2017-_clean___secure.pdf

The full answer is above, section 5.4

The short answer (for voluntary halts) is that the company requests it and the exchange decides if it should be granted and under what conditions.

[Balance]

Here’s hoping the sp gets absolutely smashed today.

[Ggcc]

Anyone willing to buy at this time? I’m guessing it will drop to the high $5 mark

[bull....]

Anyone willing to buy at this time? I’m guessing it will drop to the high $5 mark

market price will take a while to pan out as institutions hear conference call and adjust there analysis

[JeremyALD]

Surely this is enough to send the SP below $7 but I wouldn't be surprised to see it hold up OK today and finish around 7.10

[Beagle]

The loss on the Sky City Convention center simply beggars belief.

How on earth does a company bid $410m on a project that ends up costing $887m to build ?

[JeremyALD]

The loss on the Sky City Convention center simply beggars belief.

How on earth does a company bid $410m on a project that ends up costing $887m ?

It's mind boggling that's for sure. Especially for an organisation that has decades of experience with large projects?

[minimoke]

Matchprice starting at $6.00 - so far I am only $0.10 out.

[Peitro]

Surely this is enough to send the SP below $7 but I wouldn't be surprised to see it hold up OK today and finish around 7.10

$7.10? I'll sell you some at that

(Disc, I don't own any, but will buy some today to fill that order)

[bull....]

im sure there be plenty of falling knife catchers lol might be the day they get hammered?

[steveb]

The loss on the Sky City Convention center simply beggars belief.

How on earth does a company bid $410m on a project that ends up costing $887m to build ?

And they are a long way from finishing,and then remedial work,wow its probably going to cost over a billion!

[bull....]

And they are a long way from finishing,and then remedial work,wow its probably going to cost over a billion!

yep sky city got the bargain of the century , they will be popping the champange ....... fbu shareholders lost ****loads on this game of chance

[JeremyALD]

$7.10? I'll sell you some at that

(Disc, I don't own any, but will buy some today to fill that order)

Haha as I said mate I think it should be a lot lower but they have held up OK from all their previous downgrades.

Removing the dividend though might be the knife that finally makes this fall significantly

[minimoke]

The loss on the Sky City Convention center simply beggars belief.

How on earth does a company bid $410m on a project that ends up costing $887m to build ?Incompetence within the highl paid people . Of concern should also be that its their intention to redeploy current key B&I staff through the greater business - one way of ensuring the rot / cancer spreads further seems to me.

[Peitro]

Haha yeah, tongue in cheek. :)

I agree, cutting the dividend will have a significicant impact. So much uncertainty ahead in the coming weeks, let alone years, open price could be the highest of the day.

[Onion]

Haha as I said mate I think it should be a lot lower but they have held up OK from all their previous downgrades.

Match price leading into the open went from $6.50 to $6.75 in the last couple of minutes. Volumes matching went from under 300K to over 600K. A lot of last minute jockeying!

A lot of trades to process - at open the message on ANZ said:


We were unable to obtain the market data required to serve your request in the expected time. Please try again or wait a couple of minutes. If the problem persists, please contact us.

... until things settled down.

Now down 13.2% (103c).

[Balance]

Here’s hoping the sp gets absolutely smashed today.

Looks like my $6 is not going to get filled today.

Stock could end up with a $7 in front of it!

Maybe Ralph Norris resigning has taken the pressure off?

[hogie]

Haha yeah, tongue in cheek. :)

I agree, cutting the dividend will have a significicant impact. So much uncertainty ahead in the coming weeks, let alone years, open price could be the highest of the day.


Honestly those losses should not come out of the pocket of shareholders but rather out of the Chairman and Former CEOs pockets ... I bet they will still be paid a bonus and get paid out for remaining holiday pay too ... grrrr there is no accountability nowadays.

[Valiant]

Totally agree that blaming sub trades just doesn't cut it. If you are pricing fixed price contracts and understand the design is not complete, you factor this in as a risk. Its clear that they didn't understand the projects well enough to be able to price this risk in / they signed up to contractural arrangements that weren't favorable to them.

[Beagle]

It's mind boggling that's for sure. Especially for an organisation that has decades of experience with large projects?

Its gone beyond pathetic, gross incompetence and gross recklessness. All senior management involved in that contract costing and approval should be fired.

[bull....]

if this happened in australia shareholders would be launching a class action suit , in nz you just walk away lol

[peat]

cant believe they only dropped a dollar. (less already)

[whatsup]

FOMO settling in now, but who cares IMHO Im betting there will be more to come !!

[JeremyALD]

I think having such a significant portion of the NZX 50 does FBU a lot of favours.

[trader_jackson]

cant believe they only dropped a dollar. (less already)

Share price holding up amazingly well!

[Balance]

cant believe they only dropped a dollar. (less already)

Additional $467m of losses = 67 cents per share.

Wait for the Conference Call to be over - the real action will start then.

[JeremyALD]

Share price holding up amazingly well!

My $7.10 is not so laughable now!!

[Beagle]

Incompetence within the highl paid people . Of concern should also be that its their intention to redeploy current key B&I staff through the greater business - one way of ensuring the rot / cancer spreads further seems to me.

Agreed, the degree of incompetence shown from management in that division is absolutely breathtaking. To me this announcement does absolutely nothing to address key management failings within the company. Its almost like, oh my goodness we put $500m on black on the roulette wheel and it came up red, sorry about that folks. Not nearly enough contrition shown and not enough of a thorough cleansing of the dead and rotten wood within the company. Every single staff member within that B&I division should be made to reapply for their job and make their case for being retained and an independent expert construction panel appointed to make decisions on a case by case basis. In my opinion this company is uninvest able until that happens.

[minimoke]

Additional $467m of losses = 67 cents per share.

Wait for the Conference Call to be over - the real action will start then.No mention of restructuring / redundancy costs

[winner69]

No mention of restructuring / redundancy costs

$20m was mentioned on one of the slides

[minimoke]

At a personal level, I cant see anyway the Christchurch Metro Sports facility and rugby stadium will ever be built now.

[minimoke]

$20m was mentioned on one of the slides
Wouldnt that only cover one or two top execs?

[Onion]

A boom is worse than a bust (in may respects) - Ralph Norris

They'll be hoping for a bust I presume.

[Peitro]

Happy to be proved wrong, did not expect such a small impact.

I guess word had already been out there for months that the rot was deep set with these projects and the market had already priced this in.

[Raz]

And they are a long way from finishing,and then remedial work,wow its probably going to cost over a billion!

Only two real options, a certain level of current management have no idea and/or the internal cultural pressure to get the deal done, distorted incentives, combined to caused a dysfunctional process, if the management closely involved had a clue bet they are onto their next gig well before now...

[Peitro]

Share price is only back to where we were in November, considering the market, not a bad result!

[peat]

The Capital notes have now traded. the FBI140 is up from 4% before announcement to 5.5% , with only a couple of years left on its duration.

[Beagle]

https://www.msn.com/en-nz/money/business/fletcher-building-chair-resigns-as-losses-blow-out/ar-BBJ5ITX?li=AAaeXZz&ocid=spartandhp

[Nasi Goreng]

I think it has to go lower than $6.70 which was the December low. Todays price is possibly being held up because the insto's can't offload fast enough.

[minimoke]

I wonder where the 10,000 people who wanted Bob Jones to loose his knighthood after writing a satirical article are?

[winner69]

I think it has to go lower than $6.70 which was the December low. Todays price is possibly being held up because the insto's can't offload fast enough.

ASX about to open

[peat]

I would tend to think the huge size of the provisions will be including lots of spare giving Taylor room to move - as a new CEO he will want to totally ensure he doesn't get blamed for any of this later under his tenure.

BUT, I wouldn't make investment decisions on that basis either. For anyone obeying any of the masters rules, eg Benjamin Graham this company is a no go zone for a good few years now. I doubt it has ever qualified for The Zulu Principle.

[whatsup]

ASX about to open

Im picking that when Aussie opens that the s p will tank they don't take fools lightly !!

[Dust]

Im picking that when Aussie opens that the s p will tank they don't take fools lightly !!

Higher than NZX actually :t_up:

[minimoke]

Higher than NZX actually :t_up:
Give them time to catch up FBU on ASX only down 10.3% at moment. At least the Aussies are awake for the 1.00pm phone calls.

[JayRiggs]

This is holding up remarkably well at $6.90.

"Fletcher Building announces further provisions for expected losses in its Buildings + Interiors business of $486 million, leading to a total projected B+I EBIT loss of $660 million in FY18"

"Expected FY18 EBIT for the Fletcher Building Group excluding B+I remains $680 million to $720 million "

They really like mentioning what their EBIT is without B+I losses.
If we include B+I losses to group EBIT, would that imply it would be $20 million to $60 million?

[minimoke]

If we include B+I losses to group EBIT, would that imply it would be $20 million to $60 million?
Thats assuming they didn't use the same accounting people to come up with the B&I reviewed numbers. I wouldn't be trusting any of their numbers

[frostyboy]

My guess is Fletcher building profits excluding B&I are a sham and not sustainable.

I'm guessing B&I have losses as they are forced to buy materials internally at overinflated prices to market. This makes B&I loss making and the rest of Fletcher Building profitable. Without B&I what prices will Fletcher Building materials get? will there be new material entrants?

[Ggcc]

I still think the price is high for now and a price around $5.60-$5.90 is something I would be semi comfortable with the news given. Who knows in 6 months maybe lower maybe higher. But I don’t see it rising in a hurry

[Onion]

One thing occupying Mr Market

FBU value so far today: $87,487,212
Total NZX value today so far: $135,820,254

[Rep]

My guess is Fletcher building profits excluding B&I are a sham and not sustainable.

I'm guessing B&I have losses as they are forced to buy materials internally at overinflated prices to market. This makes B&I loss making and the rest of Fletcher Building profitable. Without B&I what prices will Fletcher Building materials get? will there be new material entrants?

Try buying non FBU plasterboard (Gib), Insulation (Pink Batts), roof tiles, cement, concrete... pipes...

[bull....]

Try buying non FBU plasterboard (Gib), Insulation (Pink Batts), roof tiles, cement, concrete... pipes...

cheap chinese stuff is half the cost and its available at bunnings .... etc not the same quality perhaps anyway i agree with previous poster the business from materials will be less once the b&i is worked thru in a couple years thats when results will come thru lower

[peat]

i must say I start to look a bit sideways at their debt issues now. FBI170 5 year notes being rolled over at coupon of 5% - with 5 year swap rate at 2.7% , that is a reasonable corporate premium , much more than some recent ones that were lower than Term Deposits.
But is it enough to compensate for that increased uncertainty - the feeling that surely must lurk now in all prudent investors - is this the beginning of some slope into worse and worse troubles and eventually the unthinkable.
Other notes are now at yield premium to issue (meaning a capital loss for holders)
I dont think I'd be game to lend to them for 5 years now - even with liquidity allowing an early sale.

[macduffy]

I'd agree, peat. The March '21 notes might be a better bet but even so, there must be better bets to be had on the market!

[Beagle]

i must say I start to look a bit sideways at their debt issues now. FBI170 5 year notes being rolled over at coupon of 5% - with 5 year swap rate at 2.7% , that is a reasonable corporate premium , much more than some recent ones that were lower than Term Deposits.
But is it enough to compensate for that increased uncertainty - the feeling that surely must lurk now in all prudent investors - is this the beginning of some slope into worse and worse troubles and eventually the unthinkable.
Other notes are now at yield premium to issue (meaning a capital loss for holders)
I dont think I'd be game to lend to them for 5 years now - even with liquidity allowing an early sale.

Agree 100%. Just because other issuance by other companies on similar terms has been even lower than 5% doesn't make these notes attractive at that rate. I would go further. They have at this point no confirmed long term debt arrangements in place and this therefore constitutes a material risk at present. I would think one or two trades today in their capital notes at about 7% are where these should be at but quite frankly even at that yield I see better opportunities with far more stable and vastly better managed companies elsewhere, albeit not in the bond market.

[peat]

Indeed Beagle
This article outlines the risk well
https://www.interest.co.nz/opinion/92118/david-hargreaves-says-latest-update-embattled-construction-giant-fletcher-building

"I'm now more certain than ever that Fletcher WILL have to go to shareholders for more capital - and possibly quite a chunky amount.....
I, for one, am not prepared to say this couldn't get worse yet."

[Baa_Baa]

Indeed Beagle
This article outlines the risk well
https://www.interest.co.nz/opinion/92118/david-hargreaves-says-latest-update-embattled-construction-giant-fletcher-building

"I'm now more certain than ever that Fletcher WILL have to go to shareholders for more capital - and possibly quite a chunky amount.....
I, for one, am not prepared to say this couldn't get worse yet."

Perhaps there others who are somewhat confounded by the relatively modest market reaction to a horror story in FBU? I suppose tomorrow's another day and this could come home to roost over a few more days or weeks, but a modest 9% mark down or so on the day is almost as pathetic as the circumstances that got them into such a pickle. Clearly the force is strong amongst FBU diehard shareholders.

[Joshuatree]

Buyers for $102 mill of shares today. OK fess up who's been buying, its great being a contrarian buyer but do you really think its overshot and the mkt's got it wrong, i dont, rotten for a long,long, looonnnggg time and an embarrassment to this country. Its been the automatic selection by brokers for their clients portfolios right up until now regardless of performance; and beyond?

Maybe its the spanish construction company building a stake or another co or shorter borrowing stock at mkt rates. And chairman ralph why hang around and collect more gravy until october? Not a good look.


Whenever i take the lid of my compost bin i think of FBU.

[minimoke]

Lest see if I have this right. Company announces.
- it takes 3 goes to get its books roughly right
- its about to loose approx. 25% of its total revenues.
- 25% of its business is about to write off about 100% of the profit of the other parts of the business
- employees responsible for this get to keep jobs in the company
- shareholders get to share zero % of the 75% of the business profit.

And this is worth a 9.3% discount on shareprice (which includes say 3% to cover the "Great Feb 2018 Share Market Crash")

Those kind of shareholders are not a bunch I would want to be part of.

[winner69]

Buyers for $102 mill of shares today. OK fess up who's been buying, its great being a contrarian buyer but do you really think its overshot and the mkt's got it wrong, i dont, rotten for a long,long, looonnnggg time and an embarrassment to this country. Its been the automatic selection by brokers for their clients portfolios right up until now regardless of performance; and beyond?

Maybe its the spanish construction company building a stake or another co or shorter borrowing stock at mkt rates. And chairman ralph why hang around and collect more gravy until october? Not a good look.


Whenever i take the lid of my compost bin i think of FBU.

and $40m on the ASX as well

[blackcap]

Lest see if I have this right. Company announces.
- it takes 3 goes to get its books roughly right
- its about to loose approx. 25% of its total revenues.
- 25% of its business is about to write off about 100% of the profit of the other parts of the business
- employees responsible for this get to keep jobs in the company
- shareholders get to share zero % of the 75% of the business profit.

And this is worth a 9.3% discount on shareprice (which includes say 3% to cover the "Great Feb 2018 Share Market Crash")

Those kind of shareholders are not a bunch I would want to be part of.

Kinda thanking my lucky stars I managed to get $6.89 for my partners last lot of FBU shares today. Really thought I would be looking at the low $6's or even under...

[peat]

feels like the posse are getting ready for a collective short (kinda like a class action),
I know I'm a bit tempted - my thinking is like - what could possibly go right at this point, and even if it did they have to make half a billion dollars to be back in the same position they were for a $8 share (and that surely isnt going to happen overnite). So to short would be risking a dollar a share max, and to compare that with say making 3 dollars max on the downside - almost starting to feel like a good risk/reward ratio. And thats without even factoring in a bear market.

:cool:

[value_investor]

I'm just baffled that people are still putting money into this, because in recent memory I haven't seen a company in NZ as high profile as this fold so many times..

I still think that this the estimates they've made are on a best case scenario that they will only make these losses. Anything else happens between now and these projects finishing, which is years from now and the costs get blown out even more.

This really should be trading lower than it is. Beware the bull.

[Joshuatree]

3.3% aggregate shorted sales of FBU according to shortman.com.au as at the 8th feb. Will recheck for an update.

[winner69]

Ralph Norris sacked himself but had no choice at the end of the day

But Tony Carter and Alan Jackson have been collecting huge Director fees while as this has been going on. They don’t seem to be showing much remorse. Disappointed in both.

Especially disappointed in Carter. He at least had some industry experience from his early days. He’s gone down many notches in my estimation ....not quite on the stay away from list but getting close to it.

[winner69]

Not a very diverse Board is it

Senior Management not much better. The notional HR person and poor old Michele who was handed the Building Division last year as a bit of a hospital pass (no other takers)

Need to update Michele’s profile though

https://fletcherbuilding.com/about-us/board-and-management/

[gbogo]

First NZ Capital new price target of $8.40 (down from $8.50) with Outperform rating. Clearly they think that the latest news is already priced in.

[winner69]

First NZ Capital new price target of $8.40 (down from $8.50) with Outperform rating. Clearly they think that the latest news is already priced in.

Good eh.....

...and no doubt still think the sum of the parts is more than the whole lot.

[Scrunch]

First NZ Capital new price target of $8.40 (down from $8.50) with Outperform rating. Clearly they think that the latest news is already priced in.

Well if you put rose glasses on then there is little change to forecast profitability from this. B&I wasn't making money and when it's closed down it won't make money but the risk of signing up new big unprofitable deals is gone. Take other business units guidance as advised by fbu and there a profitability stream to support the share price. B&I is only one part of the construction division so the revenue loss is not -25%. There remains a chance of future rightbacks if they overprovisioned. A sensible new CEO would max out the provision to minimise any chance of understatement and max the chance of having a slush fund to boost future profits.

[Scrunch]

But this announcement confirms the rot is deep in b&I what is the chance it's spread either within the wider construction division or into the other divisions? Only time will tell on that one.

[Beagle]

Ralph Norris sacked himself but had no choice at the end of the day

But Tony Carter and Alan Jackson have been collecting huge Director fees while as this has been going on. They don’t seem to be showing much remorse. Disappointed in both.

Especially disappointed in Carter. He at least had some industry experience from his early days. He’s gone down many notches in my estimation ....not quite on the stay away from list but getting close to it.

Very bad call on approving AIR exec's to sell shares immediately before a so called investor day a couple of years ago that included an express downgrade. Wonder if John Key will soon be Chairman of AIR...should we be worried by this ?



First NZ Capital new price target of $8.40 (down from $8.50) with Outperform rating. Clearly they think that the latest news is already priced in.

They had a $9+ target price on this before that. Absolutely ludicrous that this complete unmitigated fiasco of breathtaking proportions would only impact their valuation by 10 cps. I think whatever assumptions they've put into their creatively constructed discounted cash flow analysis are fundamentally flawed, (a DCF valuation is only as good as a whole lot of assumptions made supporting it, garbage assumptions go in - garbage valuation comes out)
I put their valuation in the same category as the scandal when they had AIR valued at $2.10 when the market was pricing it close to $3.
FCNZ love FBU but I think what's really going on here is they want the underwriting and investment banking work that could be forthcoming with a capital raise and or debt issuance. Fact of the matter is, FCNZ have been consistently wrong with FBU and FBU have been recidivist destroyers of shareholder wealth.

[minimoke]

B&I is only one part of the construction division so the revenue loss is not -25%. Don’t want to be splitting hairs but Infrastructure had earnings of $31m (down for $35 previous year), Higgins had $39m (Kaikoura work nearly complete) and Construction South Pacific $37m. Means B and I must hold the balance of the $2246m

[maknz]

Cannot understand the valuation vs NTA. People are paying a huge premium for future cash flows with a bad margin of safety.

I have been watching this fiasco with interest as someone involved in the construction industry (don't work for Fletchers). Their QSs have obviously made some huge mistakes, but I also have some sympathy with the company noting it's become incredibly tough in commercial construction and they're now willing to leave it to others.

I saw someone joking previously in this thread about sub-contractors holidaying in Saint Moritz - this isn't too far off reality. Subcontractors have been enjoying the windfall of a boom more than head contractors and there are several factors that have played into this.

There has been a big shift among large developers and government projects from NZS3910 contracts (construct only) to NZS3916 (design and build) or NEC contracts, with the latter two placing a disproportionate amount of risk on contractors, and many not yet fully understanding the amount of risk they're taking on.

Subcontractors prices have been heading up while maintaining a flat level of risk, but head contractors margins have been getting squeezed while also taking on greater risk. So Fletchers are probably right in saying it's better for walk away from future projects in this current climate (and made some terrible decisions in what they've signed up to previously).

I was involved in a government tender under a NZS 3916 contract where we had to declare our margin and basically open the book while also assuming all the design risk for a fixed price lump sum. We tendered a 10% margin and the client (govt) said commercial margins are presently 4-7%. We held firm. If you're accepting a 4-7% margin with that level of risk, you're likely expecting a 2-3% final margin in a best case scenario.

Many companies have been accepting this, essentially expecting a break-even or low single figure margin in the hope of building a moat for future work. A very dicey game to play, and as Fletchers have found out - the house always wins.

[horus1]

Not all advisors in FNZC agree

[Balance]

Not all advisors in FNZC agree

That is actually very gratifying to know.

Makes for a real market.

[minimoke]

I am loathe to use that old saying " a fish rots from the head" but. B&I a complete failure. Fletcher EQR a total failure for a company supposedly "customer first" and Fletcher Living One Central (east Frame) numbers not appearing to stack up. Time for a fine tooth comb to be taken to the whole business.
(Disc: I've been Fletechered so have little sympathy for the state this company finds itself in)

[BlackCross]

MorningStar have just put a valuation of $7.50 and a hold rec..Two things of interest that they mention...

"..Negotiations are still ongoing with the holders of the NZD 1.14 billion in U.S. private placement notes, which still poses a risk..." and "..we anticipate the divestiture of assets, especially those earning low returns with no synergies across the rest of the business. These should be the focus as long as they can be realised at attractive prices. In our opinion, Formica fits the bill on both these criteria...."

Unfortunately I seem to own quite a few FBU... not directly but through Smartshares... and with FBU accounting for almost 10% of NZDividend (DIV) I guess we'll see an almost 10% reduction in this years dividend.

[Beagle]

MorningStar have just put a valuation of $7.50 and a hold rec..Two things of interest that they mention...

"..Negotiations are still ongoing with the holders of the NZD 1.14 billion in U.S. private placement notes, which still poses a risk..." and "..we anticipate the divestiture of assets, especially those earning low returns with no synergies across the rest of the business. These should be the focus as long as they can be realised at attractive prices. In our opinion, Formica fits the bill on both these criteria...."

Unfortunately I seem to own quite a few FBU... not directly but through Smartshares... and with FBU accounting for almost 10% of NZDividend (NZD) I guess we'll see an almost 10% reduction in this years dividend.



Holders of these private placement notes have never been known to spit the dummy and demand their money back early...oh wait they certainly have !!!
I see the potential for a very large capital raise and FCNZ are setting themselves up to be the lead broker / arranger.
Barge pole material. Front row seats to watching the biggest construction cost overrun fiasco of your lifetime are available at the Fortuna Buffet restaurant daily with a requested window seat....its a fascinating watch while enjoying a very nice meal at reasonable cost...I know, I am a recidivist offender and can't help watching train crashes unfold. This morbid fascination has proved unhelpful to the hounds waistline though lol.
This convention center is only 22% complete and is already looking like destroying ~ $500m in shareholder value. With only just one fifth of that project complete and the fiasco of such gargantuan proportions why would anyone trust their latest "guess" at the total project overrun ?

[Balance]

And holders of these private placement notes have never been known to spit the dummy and demand their money back early...oh wait they have !!!
I see the potential for a very large capital raise and FCNZ are setting themselves up to be the lead broker / arranger.

Under the rules, Fletcher can do a $500m placement supplemented by a $15k SPP to all shareholders.

Watch for it.

[winner69]

Holders of these private placement notes have never been known to spit the dummy and demand their money back early...oh wait they certainly have !!!
I see the potential for a very large capital raise and FCNZ are setting themselves up to be the lead broker / arranger.
Barge pole material. Front row seats to watching the biggest construction cost overrun fiasco of your lifetime are available at the Fortuna Buffet restaurant daily with a requested window seat.
This convention center is only 22% complete and is already looking like destroying ~ $500m in shareholder value. With only just one fifth of that project complete and the fiasco of such gargantuan proportions why would anyone trust their latest "guess" at the total project overrun ?

Government won’t be getting much tax out FBU this financial year ....so sort of subsidising this Sky project

And didn’t Sky get more gaming licenses for almost nothing

[Beagle]

Government won’t be getting much tax out FBU this financial year ....so sort of subsidising this Sky project

And didn’t Sky get more gaming licenses for almost nothing

Its hard to be a winner betting against the house isn't it !

[Sideshow Bob]

I'm with Beagle on this. Love a good train wreck me, when it is from the sidelines and have no vested interest (phew).

Struggle to see why the share price isn't lower. But if I was the recently appointed CEO, I'd be trying to throw everything into it so have the potential to come out looking good out the other side. I'd also be taking a large broom through the division.

[minimoke]

But if I was the recently appointed CEO, I'd be trying to throw everything into it so have the potential to come out looking good out the other side. I'd also be taking a large broom through the division.Alternatively let the SP get hammered, allow previous CEOs to take the blame and then take credit for inevitable SP increase. At best he can now expect to maintain current levels. It ought not be going up any stage in the future.

[arc]

It will either be a Cut In the dividend, or a Cut OF the dividend
most likely the latter

[Beagle]

feels like the posse are getting ready for a collective short (kinda like a class action),
I know I'm a bit tempted - my thinking is like - what could possibly go right at this point, and even if it did they have to make half a billion dollars to be back in the same position they were for a $8 share (and that surely isnt going to happen overnite). So to short would be risking a dollar a share max, and to compare that with say making 3 dollars max on the downside - almost starting to feel like a good risk/reward ratio. And thats without even factoring in a bear market.

:cool:

Looks like a good bet to me mate and you'll be in clover if / when they have to do a deeply discounted rights issue.

[macduffy]

I guess we'll never know how much consultants have/will be paid to advise FBU to do the blooming obvious and quit the "big construction project" business. Hidden in Restucturing Costs or something similar?

Perhaps they'll reappear some time down the track as a junior JV partner in some big project - as in the days of JV's for big jobs such as Kawerau, Kinleith, Tongariro Power etc.

[Joshuatree]

From Shortman today for FBU on ASX

Gross shorts 1
Issued capital
% Capital shorted 2
Trade volume 3
Shorts as % of volume


Wed 14th Feb, 2018
1,608,631
697,040,440
0.23%
5,476,389
29.37%

[Beagle]

Maybe Jascinda gets her 10,000 houses per annum after all ?
https://www.msn.com/en-nz/money/news/fletcher-building-disaster-how-it-will-affect-you/ar-BBJ9ePS?ocid=spartandhp

[minimoke]

Maybe Jascinda gets her 10,000 houses per annum after all ?
https://www.msn.com/en-nz/money/news/fletcher-building-disaster-how-it-will-affect-you/ar-BBJ9ePS?ocid=spartandhpRon Angel -Union Guy. Yes I would be worried for the workers. But don't worry the key people will get to stay.

Retirement funds. small investors still held FBU - the writing has been on the wall. Why were you still holding for petes sake!

Housing Market. Hicky - What are you thinking. FBU cant manage vertical infrastructure. Just wait for One Central to blow out. And you reckon they should be part of kiwibuild. There's a govt subsidy / bailout if ever I saw one. EQR is an excellent reason why FBU should stay clear

[alistar_mid]

don't worry I'm gonna rescue Fletchers

sent this to their HR

Its a part piss take kicking them when they are down, but part serious

Hi,

As a shareholder in Flecthers I am a bit worried at the incompetency displayed by your senior management, so would like to offer up my services to help turn around your company.

My CV is attached, I have a pretty standard working career in analyst roles - mostly finance related - across 15 years in many different corporate both here and overseas.

However my value add, is I walk the walk: I have built a multimillionaire dollar property and equity investment empire over the last 15 years, by following a defined investment strategy.

I bring an executive level skill set and outside the box thinking which I think could greatly assist you in your time of need. I have built an empire on limited capital and I have done so through sound investment decision making, management and execution. I create and deliver value.

The definition of insanity is to do the same thing again and expect a different result - if you want to turn Fletchers around you need fresh thinking and ideas, backed up by sound real world experience.

It is in your best interest to contact me, look forward to hearing from you soon

Thanks


Reading it again now could have done a better job on spelling and gammar haha

[whatsup]

I think all FBU s hers should read the book written about Fletchers, "The Clash of the Titans " in the 1980-90's, talk about wealth distruction something like $2,000,000,000 gone yes BILLION !!, leopards done change their spots, culture of bad decisions, compulsory reading of how not to run a company headed by a MBA to boot !!!

[JayRiggs]

I think all FBU s hers should read the book written about Fletchers, "The Clash of the Titans " in the 1980-90's, talk about wealth distruction something like $2,000,000,000 gone yes BILLION !!, leopards done change their spots, culture of bad decisions, compulsory reading of how not to run a company headed by a MBA to boot !!!

https://www.amazon.com/Battle-Titans-Trotter-Fletcher-Challenge/dp/014100472X

[hogie]

don't worry I'm gonna rescue Fletchers

sent this to their HR

Its a part piss take kicking them when they are down, but part serious

Hi,

As a shareholder in Flecthers I am a bit worried at the incompetency displayed by your senior management, so would like to offer up my services to help turn around your company.

My CV is attached, I have a pretty standard working career in analyst roles - mostly finance related - across 15 years in many different corporate both here and overseas.

However my value add, is I walk the walk: I have built a multimillionaire dollar property and equity investment empire over the last 15 years, by following a defined investment strategy.

I bring an executive level skill set and outside the box thinking which I think could greatly assist you in your time of need. I have built an empire on limited capital and I have done so through sound investment decision making, management and execution. I create and deliver value.

The definition of insanity is to do the same thing again and expect a different result - if you want to turn Fletchers around you need fresh thinking and ideas, backed up by sound real world experience.

It is in your best interest to contact me, look forward to hearing from you soon

Thanks


Reading it again now could have done a better job on spelling and gammar haha


That's Gold ... I hope they offer you a job :)

[Lion]

That's Gold ... I hope they offer you a job :)

FBU management may have their faults, but do you really think they would accept an offer to fix them from someone who can't spell Fletchers? <sigh> these things do matter. Dreamer.

[Brovendell]

Maybe they would offer Alistar Mid a job. They can't spell profit. They don't even know the meaning of the word.:t_up:

[hogie]

FBU management may have their faults, but do you really think they would accept an offer to fix them from someone who can't spell Fletchers? <sigh> these things do matter. Dreamer.

Surely the Senior Management at "Fletchers" can't spell it either ... they seem to be pretty retarded ...

[minimoke]

Surely the Senior Management at "Fletchers" can't spell it either ... they seem to be pretty retarded ...
They sure cant add ( and thats even more basic than spelling) needing how many goes to do their sums? Even then they needed an outsider to give them a hand.

Alistar would undoubtedly add to their gene pool

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11995190

One view as to why FBU does not need to raise new capital.

[Fred114]

There is a change in contract being alluded to here, from a contract with an assignment, to a contract with novation. In contract law, the assignment model is where a contract is drawn up between the client and the contractor (Fletcher's) and they complete the assignment. In this model, they claim to have lost hundreds of millions of dollars, and their CEO notes that level of risk is too large a burden to bear. They blame the cost of what has been designed for the assignment as too difficult to determine. For example, there has been a great deal of effort in building technology to streamline and make the process of building more efficient, which impacts on flexibility of design. Fletcher's have been an active player to develop that technology, that limits (out of concern for efficiency) the options for design. Such is the streamlining effect of the building process.

A novation contract takes care of that problem, but comes with deeper concerns. These types of contract are more common in Australia and the UK, but not New Zealand. Arrow International are an early adopter of this type of contract in New Zealand, and applied it throughout the Christchurch rebuild. It works by transferring the obligation under the old contract with another obligation, either an extra one, or a replacement. What happens in effect is that a contract between the client and Fletcher's is drawn up (by Arrow Int) and then it is "designed" or worked out as it unfolds. Project managers such as Arrow Intl take a more prominent role in making design decisions. Decisions before the contract, that sets up the conditions for the building process to unfold, are set aside. True, with an assignment contract, you can simply agree to change the terms. But in complicated building processes, those luxuries are difficult to identify. What is being contested is that building processes are better at design than designers. Architects for instance are to compete alongside other sub-contractors to play their part in the process. Should their design decisions not fit with the efficiency of building technology, their decisions are set aside.

Novation is commonly used in futures and options markets, especially with OTC derivatives. In summary, what was a mechanism for more freedom between parties is in effect a reduction of thought. This is a return to classic neoliberalism, which is still being worked out in New Zealand.

[alistar_mid]

FBU management may have their faults, but do you really think they would accept an offer to fix them from someone who can't spell Fletchers? <sigh> these things do matter. Dreamer.

hahaha, thats your value add?

[voltage]

I do hold some FBU. It is likely to take a few years at least to sort their mess out, so is it a sell at today' price or I am selling at the bottom?

[alistar_mid]

FBU management may have their faults, but do you really think they would accept an offer to fix them from someone who can't spell Fletchers? <sigh> these things do matter. Dreamer.

I think your'e actually serious is the funny part.

Reading comprehension my friend, you lack it.

I stated it was a piss take... and then! I even state that I read it after and acknowledge the spelling / grammar mistakes

[RTM]

I do hold some FBU. It is likely to take a few years at least to sort their mess out, so is it a sell at today' price or I am selling at the bottom?

I have sold mine. a while ago. Will consider repurchasing at $5.50 or less. And maybe not even then. Personally I would let them go. But I am probably wrong as I thought the sky was falling on retail and do not own Briscoes or Hallinsteins. (or the Warehouse)
Good luck.

Cheers
RTM

[winner69]

You’ll all laugh with derision with this .....but she has a strong point

https://www.stuff.co.nz/business/101447348/gattung-says-fletcher-wouldnt-have-foundered-with-a-woman-at-the-top

[Baa_Baa]

You’ll all laugh with derision with this .....but she has a strong point

https://www.stuff.co.nz/business/101447348/gattung-says-fletcher-wouldnt-have-foundered-with-a-woman-at-the-top

Is she joking, with her record of presiding over shareholder wealth destruction at Telecom? Many weren't laughing about that.

[Brovendell]

Is she joking, with her record of presiding over shareholder wealth destruction at Telecom? Many weren't laughing about that.

Theresa Gattung CEO of Telecom :Oct 1999 through to Feb 2007.
Telecom Share Price :8th Oct 1999 was $7.72
Telecom Share Price :2nd February 2007 was $4.85

[Joshuatree]

Telecom was in a no win storm and under constant pressure to split.Gattung held the regulators off for as long as possible. You guys just sound like old school women in power haters;)

[alistar_mid]

Telecom was in a no win storm and under constant pressure to split.Gattung held the regulators off for as long as possible. You guys just sound like old school women in power haters;)

lmao

and the reason they got pressured to split? monopolistic practices driving out all competition and stalling broadband growth in NZ as long as possible to keep customers on higher margin plans.

I was working there at the time

oh at least not forget this gem "confusion is our chief marketing tool"

[Baa_Baa]

Telecom was in a no win storm and under constant pressure to split.Gattung held the regulators off for as long as possible. You guys just sound like old school women in power haters;)

You are confusing her intended message of the value of diversification, with her poor delivery of the message (off the cuff imo), against her own personal track record of destroying shareholder value, while responsible and accountable to shareholders.

I get the diversification message, it is just that she chose an ill-considered (and disrespectful imo) context of assigning blame to FBU leadership (Sir Ralph to be precise, who is accountable but not directly responsible) for having a man in the Chair (how could she possibly make that connection ... choose man = failure), and by extension caused the debacle at FBU, but the gall to suggest that a woman in the Chair would have had an alternate outcome!

What a twat she is, gender aside. Gattung had responsibility for one of the worst shareholder outcomes on record of any CEO of a listed company in New Zealand, full stop. She appears to be thoroughly conceited about that and no credibility whatsoever imho.

9506

[stoploss]

You are confusing her intended message of the value of diversification, with her poor delivery of the message (off the cuff imo), against her own personal track record of destroying shareholder value, while responsible and accountable to shareholders.

I get the diversification message, it is just that she chose an ill-considered (and disrespectful imo) context of assigning blame to FBU leadership (Sir Ralph to be precise, who is accountable but not directly responsible) for having a man in the Chair (how could she possibly make that connection ... choose man = failure), and by extension caused the debacle at FBU, but the gall to suggest that a woman in the Chair would have had an alternate outcome!

What a twat she is, gender aside. Gattung had responsibility for one of the worst shareholder outcomes on record of any CEO of a listed company in New Zealand, full stop. She appears to be thoroughly conceited about that and no credibility whatsoever imho.

9506

A Penny for your thoughts on Feltex,Pumpkin Patch Baa Baa ?

[Joshuatree]

You are confusing her intended message of the value of diversification, with her poor delivery of the message (off the cuff imo), against her own personal track record of destroying shareholder value, while responsible and accountable to shareholders.

I get the diversification message, it is just that she chose an ill-considered (and disrespectful imo) context of assigning blame to FBU leadership (Sir Ralph to be precise, who is accountable but not directly responsible) for having a man in the Chair (how could she possibly make that connection ... choose man = failure), and by extension caused the debacle at FBU, but the gall to suggest that a woman in the Chair would have had an alternate outcome!

What a twat she is, gender aside. Gattung had responsibility for one of the worst shareholder outcomes on record of any CEO of a listed company in New Zealand, full stop. She appears to be thoroughly conceited about that and no credibility whatsoever imho.

9506

You're right about her cheap shot at Ralph. FBU has been rotten for a long time , apologies to all on that.

[Ggcc]

I’m just going to wait till the next downgrade for this share (beauty...... cough cough)

[winner69]

Theresa says she (or a woman) would not have left Fletcher’s get into the state it has

Gaynor says Norris hadn’t made any mistakes in his career so had not had the opportunity to learn from mistakes
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11996036

Putting the two together maybe Theresa is right ....a failed woman leader such as Theresa (Sharetrader popular view) would have been good for Fletcher’s