FBU Chart.

[AMR]

I concur! (although I have to work with old Incredible charts data for NZX stocks).
1. Break of the 55 day EMA due to friday's 6.99 close
2. Break of the previous high to form a horrible looking double bottom.

[bermuda]

I concur! (although I have to work with old Incredible charts data for NZX stocks).
1. Break of the 55 day EMA due to friday's 6.99 close
2. Break of the previous high to form a horrible looking double bottom.

Looks like 3 double bottoms to me. Possibly 5.

[Phaedrus]

There are no "double bottom" formations here.

[Glendoonie]

There are no "double bottom" formations here.
Would you be so kind as to provide evidence (or lack thereof) of the said 3 to 5 "double bottoms"? What are you seeing, guys?

[Grand Uber]

According to the tech analysis book im reading at the moment a double bottom has
-A minimum of 10 days between the two lows and sometimes as long as two or three months

-4% or less variation between the two lows, a centre upmove of at least 10% from the lower of the two bottoms

-And the price must rise above the confirmation line which is a horizontal line drawn from the highest high in the middle of the W shape.

Apparently if you wait for the data to cross the confirmation line there is a 97% chance of making a profit, and the average gain is 40%

But its a pretty clear cut occurance on a chart, and as phaderus says, its not on this one

[Phaedrus]

Right. At the simplest level, you need a dual bottom. There is a clear bottom mid-July, but it lacks an obvious partner.

[bull....]

After yesterday's action it looks more like a failed breakout now and a consolidation pattern at the lows is forming, which is highly bearish.
Combine that with the nzx50 index about to start a new leg down and you can imagine the out come.

[bermuda]

After yesterday's action it looks more like a failed breakout now and a consolidation pattern at the lows is forming, which is highly bearish.
Combine that with the nzx50 index about to start a new leg down and you can imagine the out come.

I think the biggest factor will be the continued fall of the $US and DOW and the forecast imminent failure of a large US bank. The formica purchase was a disaster if you consider the timing.

[bull....]

Boral announced their results not that flash , comment on hard market conditions esp in the us.
There comments about the us didnt look flash for fbu formica business

[duncan macgregor]

FBU down 41% so far this year what more is there to say other than the prospects are worsening by the day. TA would have had you out long ago. Even the long term fundies must now see the mistake in not having a sell strategy. The NZ building industry is heading down until that changes its pointless even trying to work out where the bottom might be. Macdunk

[Deev8]

TA would have had you out long ago ... The NZ building industry is heading down until that changes its pointless even trying to work out where the bottom might be. Macdunk

But TA may well had had you buying-in on Monday


You can see that the indicators featured here have all trigger Buy signals :-
(1) Break of a confirmed trendline.
(2) Break above 60 day Simple Moving Average.
(3) Slow Stochastic Oscillator "Buy" signal.
(4) Break above 14% Trailing Short Stop.
(5) Close above $6.91 = new Uptrend.

[Grand Uber]

Assuming thats a bad thing?

Just having a quick look at the chart posted above and correct me if im wrong but didnt it find support at the lower trendline today and then head back up, we could see a new high in the trend soon

And for a day to hit a low as low as 666 and then close at the high of 703 is bullish, selling lost momentum and the bulls won the day

[duncan macgregor]

But TA may well had had you buying-in on Monday DEEV8 You are quite right TA depending on your buy signal might very well have you back in on monday. However it will take you back out again if it starts to downtrend all over again. The company has averaged a 5% a month drop in share price this year so far, which makes buy signals a risky venture. Most people would have to have a well confirmed buy signal before risking it. The FA outlook is pretty grim in the building game plus their American venture is costing them big which makes this company high risk of returning to a downtrend. Macdunk

[Glendoonie]

... its a pretty clear cut occurance on a chart, and as phaderus says, its not on this one
Many thanks GU and others for your contributions to the TA pool of knowledge directed to Phaedrus' FBU charts and the formations thereof. As much as I wish it were a science - I could cope with that, I am thinking that predicting share price fluctuations using TA is little more than a crapshoot. Investing using TA is more interesting than shooting craps, but you're just as likely to lose your money on a bad day.

[bermuda]

Many thanks GU and others for your contributions to the TA pool of knowledge directed to Phaedrus' FBU charts and the formations thereof. As much as I wish it were a science - I could cope with that, I am thinking that predicting share price fluctuations using TA is little more than a crapshoot. Investing using TA is more interesting than shooting craps, but you're just as likely to lose your money on a bad day.

Gleendoonie,
Whre's FBU when the DOW reaches it's bottom at 9800?

[duncan macgregor]

Gleendoonie,
Whre's FBU when the DOW reaches it's bottom at 9800? What makes you think that the DOW will bottom there. The American economy will crash what happens to FBU and other companies in NZ when that eventuates?. Macdunk

[Glendoonie]

Gleendoonie,
Whre's FBU when the DOW reaches it's bottom at 9800?

Bermuda, I have never considered the American economy (reflected in the DOW) to be a major influence on an NZ company such as FBU. Why should it? There are people pullings the strings in thestock markets the world over. I'll bet these same people shoot craps too ;)

[Phaedrus]

I am thinking that predicting share price fluctuations using TA is little more than a crapshoot.....you're just as likely to lose your money on a bad day.
But Glendoonie, we are not even trying to predict future price fluctuations. The aim here is to closely monitor current price action such that any significant changes are identified as soon as they occur. The chart as posted identified the current FBU short-term uptrend as the biggest counter-trend rally since FBU peaked last year. Fact. What we choose to do with this knowledge is entirely up to us. We each have to make an individual decision as to whether we are going to act on this information or ignore it. The signals constitute permission to buy, not a demand!

If you are looking for a system that will not "lose your money on a bad day", I'm afraid your search is doomed to failure!



Where's FBU when the DOW reaches it's bottom at 9800?
Bermuda, it is obvious from this comment that you are not just looking at FBU in isolation, but rather within the context of the wider market. Such an approach makes good sense. You (and all those that share your Bearish views) would obviously choose to ignore these recent signals.
One way of referencing individual buy/sell decisions to the general market is by using the Index to regulate your overall strategy. Here is a chart of the NZSX50 Index and you can see that it is currently in a "Caution" zone. People will have different attitudes to such zones, but some would take them as times when all buying is prohibited. Very conservative long-term investors might be using a system as shown at the bottom of the chart. They would have moved to 100% cash in November of last year and would not be contemplating ANY purchases until the market as a whole shows positive long-term Momentum.

http://h1.ripway.com/Phaedrus/NZSX50mom821.gif

In the meantime, Grand Uber is quite right - FBU has been in an uptrend for over a month, and still is. No-one knows how far this uptrend will run and you might need to be nimble to profit from it, but the fact remains - it's there. You won't find me scoffing at people that choose to ignore it though - I appreciate that not everyone is interested in active trading, particularly at times like this.

[macduffy]

Bermuda, I have never considered the American economy (reflected in the DOW) to be a major influence on an NZ company such as FBU. Why should it? There are people pullings the strings in thestock markets the world over. I'll bet these same people shoot craps too ;)

I really should leave it to Bermuda to respond but will just make the point in the meantime, that Formica ( largely an American operation ) now forms a very large part of FBU's business.

;)

[Footsie]

Phaedrus

Whilst the above long term chart has worked over the past 6 years for the NZX

Are you confident it would work in a market that isnt trending.... ie just a sideways maket.

Are you able to back test that strategy say 30-40 years?

[bermuda]

Bermuda, I have never considered the American economy (reflected in the DOW) to be a major influence on an NZ company such as FBU. Why should it? There are people pullings the strings in thestock markets the world over. I'll bet these same people shoot craps too ;)

Please see my post no. 282. The Formica purchase was incredibly bad timing and when the DOW falls lower so will FBU. Even though the charts are looking better.My brother holds so am interested.

[Phaedrus]

Whilst the above long term chart has worked over the past 6 years for the NZX are you confident it would work in a market that isnt trending.... ie just a sideways market?
In a non-trending market, most any sort of long-term indicator will dither about the mid-line and tell us nothing that we didn't already know - ie the market is in a trading range. At such times, there is little profit in simply holding stocks for lengthy periods of time so the obvious move is to endeavour to trade the fluctuations. Momentum indicators are very good for this, but where a period of 150 days might suit the longterm outlook and 45 days the medium-term, a very much shorter period such as 12 days (or even less) would be indicated. This would, of course, be applied to individual stocks. Under these circumstances you would not be using the Index to control your overall exposure unless it dropped below the trading range it had established - that would indicate the beginning of a "Caution" period.


Are you able to back test that strategy say 30-40 years?
My backtesting is restricted to the limited NZSX50 history that is available - it is a relatively new index. There have been many long-term studies applied to the Dow though, with Momentum based sytems generally outperforming "Buy and Hold".

[Footsie]

I've used Phaedrus theory for the ASX (apologeis if on the wrong forum)
Selling Momentum appears to have peaked. However the market is still Net Selling, therefore unlikely to emerge from the Bear until at least Early 2009.
The charts are still indicating a fall to 4250-4400 is likely at some point before we can all move on

However the reality is that a sideways market is likely at the end of this bear

http://i524.photobucket.com/albums/cc323/footsie_photo/Capture1.jpg
click link for chart
still dont know how to post charts on here.

[Servaas]

I really should leave it to Bermuda to respond but will just make the point in the meantime, that Formica ( largely an American operation ) now forms a very large part of FBU's business.

;)

Is the "largely an American operation" perception correct? Page 26 of the 2008 annual results presentation on the FBU website has Formica America contributing 38% of total world-wide Formica revenues..

[Footsie]

Hopefully this post now works

[beacon]

Well noted and pointed Servaas...

[Glendoonie]

Is the "largely an American operation" perception correct? Page 26 of the 2008 annual results presentation on the FBU website has Formica America contributing 38% of total world-wide Formica revenues..

Well, for some reason FBU share price is trending upward. The Formica venture (or whatever you call it) was unknown to me when so when I read about it on this site I bailed out of FBU pronto.
In on Tuesday out on Wednesday this week. Nimble or what, Phadrus? :) So I'm safe for now and very relieved, but no wiser for my actions. SO many things influence commodity markets the world over. FA tells you what is happening, TA shows you what has been happening and the rest is random. I think I am suffering from delusins of adequacy when I make a researched and so-called informed decision to invest on the NZX.

Is it just me, or do others feel this way?

G

[Glendoonie]

Nimble or what, Phadrus? :)
Oops, Phaedrus, sorry 'bout that.

[Grand Uber]

FA tells you what is happening, TA shows you what has been happening and the rest is random.
G

Id say TA has made a good buy decision so far, now its just a matter of keeping an eye on the signals and knowing when to get out.

This isnt a personal attack on anyone but I notice all the people who knock TA on this forum seem to know very little about it. How can you know that something doesnt work when you dont know how to use it?

[Phaedrus]

Glendoonie, your entry on Tuesday (when FBU closed at $6.80) looked good to me. You were buying into an uptrend that had been confirmed the previous Friday. The question is, why did you sell the next day? This was a particularly positive day with a bullish engulfing pattern ending in a Closing Marubozu. The Bulls were in control during the session and closed the market on a high of $7.03. In short, you were selling just when technical Buy signals were firing left, right and centre. Why sell? As a "retail" investor you will always be one of the last to learn anything - the market had assimilated that Formica news well before you even noticed it. I guess you were working on the debatable premise that "FA tells you what is happening". Certainly it may, but more important than what is happening, is how the market is reacting to what is happening. So when you say "TA shows you what has been happening" you are not quite right. TA shows you the markets response to what is happening.

You know, G, it looks to me as though you bought on TA and sold on FA - the reverse of what quite a few people do. I would suggest that you meticulously analyse FBU to the best of your fundamental ability, decide whether you consider it a desirable stock or not, and then time your entry and exit using TA.

Don't focus on the random nature of short-term market movements. Filter out such market "noise" and concentrate of the underlying trends - they are NOT random!

One last bit of gratuitous advice - don't try too hard. Don't beat yourself up if you get it "wrong". Expect to be wrong sometimes. You can't win them all! Fortunately you don't have to. All you have to do is be right more often than you are wrong, and limit your losses. You want to make more money when you are right than you lose when you are wrong.

[Glendoonie]

Glendoonie, your entry on Tuesday (when FBU closed at $6.80) looked good to me. You were buying into an uptrend that had been confirmed the previous Friday. The question is, why did you sell the next day?

You know, G, it looks to me as though you bought on TA and sold on FA - the reverse of what quite a few people do.

Don't focus on the random nature of short-term market movements. Filter out such market "noise" and concentrate of the underlying trends - they are NOT random!

I sold because I got cold feet. Once bitten ... and all that.

Your advice is sterling as always. Yes, market noise is random, but there has to be a way of using short term market movements to financial advantage. I thought TA could reduce the risk of short term trading in the stock market. But, clearly, it doesn't work like that.

Is there no way of using short term market movements to provide some sort of income?

G

[AMR]

I sold because I got cold feet. Once bitten ... and all that.

Your advice is sterling as always. Yes, market noise is random, but there has to be a way of using short term market movements to financial advantage. I thought TA could reduce the risk of short term trading in the stock market. But, clearly, it doesn't work like that.

Is there no way of using short term market movements to provide some sort of income?

G

Not a one day trade, not a stock, and definitely not an NZX issue.

Try forex or futures (!) for that.

[Phaedrus]

I thought TA could reduce the risk of short term trading in the stock market. But, clearly, it doesn't work like that. Is there no way of using short term market movements to provide some sort of income?

Sure there is. The important thing though is that you must use tools that are appropriate for the job. The charts I generally post here use "end of day" prices and indicators that I have optimised for trading "medium-term" trends. Such indicators are quite unsuitable for trading short term market movements.

Have you noticed how I often use a Slow Stochastic oscillator of maybe 50 days or even more? For short-term trading what you are wanting is a fast Stochastic (5 days) with very short-term moving averages and oscillators. You need a sound knowledge of candlesticks, the ability to update your charts using intraday data, and you need to be able to act quickly. You simply can't make money on short-term movements using EOD data and making all your decisions out of market hours.

I would suggest as a starting point you read "Japanese Candlestick Charting Techniques" by Steve Nison. This book has an excellent section on using candlesticks and oscillators in combination, along with other techniques well suited to short-term trading.

[Glendoonie]

Sure there is. The important thing though is that you must use tools that are appropriate for the job... what you are wanting is a fast Stochastic (5 days) with very short-term moving averages and oscillators. You need a sound knowledge of candlesticks, the ability to update your charts using intraday data, and you need to be able to act quickly. You simply can't make money on short-term movements using EOD data and making all your decisions out of market hours.

I would suggest as a starting point you read "Japanese Candlestick Charting Techniques" by Steve Nison. This book has an excellent section on using candlesticks and oscillators in combination, along with other techniques well suited to short-term trading.

Yes, this sounds like the very thing I need. Thank you, Mr P.

[Glendoonie]

Not a one day trade, not a stock, and definitely not an NZX issue.

Try forex or futures (!) for that.
Well noted. Cheers.

G

[AMR]

If anyone is interested...

http://www.sharetrader.co.nz/wlmailhtml:{BEDD9E33-9393-43DC-8644-9C16B6812285}mid://00000024/!x-usc:cid:image001.jpg@01C90901.E304A700

http://www.sharetrader.co.nz/wlmailhtml:{BEDD9E33-9393-43DC-8644-9C16B6812285}mid://00000024/!x-usc:cid:image005.jpg@01C90901.E304A700You are invited to come and meet
Jonathan LING
Managing Director and Chief Executive Officer
Fletcher Building Limited
Stories from the frontline of New Zealand businesses
Jonathan Ling is Managing Director and CEO of Fletcher Building Limited, New Zealand’s leading building materials company with operations in aggregates, cement, concrete, steel, fibreglass insulation, plasterboard, roofing and laminates and panels and is involved in residential and commercial construction and building materials distribution.
Career highlights
· Appointed Chief Executive of Fletcher Building in September 2006, joined Fletcher in 2003
· Prior to Fletcher Building he was Chief Executive of the company’s Laminates & Panels Division based in Melbourne
· Worked for Pacifica, Visy and Nylex
· Bachelor of Engineering (Mechanical) degree from the University of Melbourne and an MBA from the Royal Melbourne Institute of Technology
When:
12.00pm-1.00pm, Friday 29 August 2008

Where:
Eng1401, 401-401,
Engineering Building, 20 Symonds Street
Auckland


Please note that there is a limited number of seating.
RSVP to r.du@auckland.ac.nz (wlmailhtml:{BEDD9E33-9393-43DC-8644-9C16B6812285}mid://00000024/!x-usc:mailto:r.du@auckland.ac.nz)







This event is co-sponsored by

the University of Auckland Commerce Student's Association.

http://www.sharetrader.co.nz/wlmailhtml:{BEDD9E33-9393-43DC-8644-9C16B6812285}mid://00000024/!x-usc:cid:image006.gif@01C90901.E304A700

[underground]

i was supposed to sign up to have lunch with the bloke but i was caught up with assignments, did u get a chance to AMR ?

[Hoop]

Analyst presentation of the Formica group - Ohio - USA - Sept 2008
PDF file 36 pages (http://www.fletcherbuilding.co.nz/Corporate/downloads/Analyst%20Presentation%20Ohio%20USA%20Sept%202008. pdf)

[winner69]

Analyst presentation of the Formica group - Ohio - USA - Sept 2008
PDF file 36 pages (http://www.fletcherbuilding.co.nz/Corporate/downloads/Analyst%20Presentation%20Ohio%20USA%20Sept%202008. pdf)

The chart showing business cycles looked interesting ..... but did they put that in to give punters a bit of hope

[beacon]

What a sorry state of affairs Hoop, that you have to post the pdf, while NZX is content with intimating they have it. What arrogance... or incomptence...?

[Hoop]

What a sorry state of affairs Hoop, that you have to post the pdf, while NZX is content with intimating they have it. What arrogance... or incomptence...?

To be fair to NZX, I actually got this statement alerted to me this morning from them via direct brokering and I passed it on to ST... and did one better, as I hot wired the link, for easy access.

From the NZX announcement I had to muck around and copy and paste the URL to a newly opened tab on my browser, go to FBU website and find the latest news.

NZX announcement in its entirety printed in green below (Edit- My reply through ST has livened the link it was not live in the NZX announcement this morning, nor in my green quote)

Analyst presentation Formica Group, Ohio, USA - 12 September 2008.

Full presentations can be viewed on the FBL website at
http://www.fletcherbuilding.co.nz/corporate/presentation.aspx

I noticed on the ASX the same FBU announcement.... when you click on the announcement it takes you straight there and PDF downloads and opens... much easier and less hassell.

I admit the ASX announcements in general are so much more superior. I'm at a loss (and disappointed) as to why the NZX announcements are sub-standard.

Anyway.. this is the FBU thread so I won't allaborate anymore on this issue here.

[bull....]

Only being held up due to dividend , wait to the div has been paid new lows coming.

[winner69]

Will soon have a 5 in front of the shareprice ....... even then not cheap when considering the future outlook ...... but one day FBU will have its day and be a great investment .... just keep an eye on those charts

[Hoop]

It seems Mr Ling has been shopping :cool:


REL: 1136 HRS Fletcher Building Limited ASSET:FBU: Agreement to acquire Fielders Australia Pty Limited Auckland
7 October 2008 - Fletcher Building Limited advises that it has entered into a conditional agreement to acquire all of the shares in Fielders Australia Pty Limited ("Fielders"). Fielders is owned jointly by Hills Industries Limited (60%) and FSR Investments Pty Ltd (40%) The agreement is conditional upon, amongst other things, due diligence, ACCC and FIRB approval, and the approval of Fletcher Building's board of directors. Based in Adelaide, Fielders provides roll formed steel building components to the Australian commercial, industrial and residential construction industries. The business has annual sales of approximately A$275M and employs 890 people across Australia. Mr Jonathan Ling, Chief Executive Officer of Fletcher Building Limited, stated that "Fielders is a well run business that has a solid reputation for performance with its customers. It would complement our existing business units in Australia and New Zealand." For further information contact: Philip King Paul Zuckerman GM Investor & Media Relations Chief Executive Steel Ph: 649 525 9043 Ph: 649 525 9152

[Hoop]

Announcement today ... FBU closed today at 586 -53 -8.3% https://www.directbroking.co.nz/DirectTrade/images/spacer.gif

DRP..:(.ouch


REL: 1221 HRS Fletcher Building Limited DRP: FBU: Dividend Reinvestment Plan Price Determined Auckland, 6 October 2008 - The share price used to calculate entitlements under the Fletcher Building Limited Dividend Reinvestment Plan has been set at NZ$6.8835

[Lawso]

During his term as CEO and MD of FBU Ralph Waters was rightly regarded as one of the smartest cookies around. But even he can't win 'em all.

The current FBU Annual Report reveals that in August '07 Waters bought 100,000 FBU ords for $1,118,000 (1118cps). In May '08, in what should have been a signal to the rest of us punters, he sold 100,000 for $784,538. I make that a loss of $333,538!!

I doubt if anyone on ST did as badly as that. But I wouldn't waste too much sympathy on RW. He, or "Associated Persons", still hold 1,043,424 ords. And he picked up $145,500 in director's fees.

Not bad going. But mere peanuts compared with the loot grabbed by the thieving #*#&%#s at Contact Energy - a much simpler company to manage, I would have thought. Deputy chairman Phil Pr**k, for example, got a total of $364,815 for 2007-08. And the so-and-sos plan to nearly double the pool of directors' fees for the current year. This will give non-exec down-the-table directors fees of $250,000+ and the revered Deputy Chairman - well, work it out for yourself.

[Hoop]

No NZX announcement just a media piece that maybe be of some significance to FBU shareholders.

Fletcher Building unveils big industrial development
By Sarah-McDonald
Created 11/07/2008 - 07:46

by Chris Hutching




Neither global financial turmoil nor threatened recession are stopping Fletcher Building’s redevelopment of a disused South Auckland quarry that it says will provide more than $100 million of earnings.
Filling in the Wiri quarry will also cost millions and create more than 40ha of industrial land, which real estate analysts say is in desperately short supply in Auckland.
Fletcher Building infrastructure division’s chief executive, Mark Binns, said the property will be sold in blocks between 5ha to 20ha.
Fletchers owns 26 quarries throughput New Zealand, some in joint ventures, and in coming years several will come to the end of their life span.
The Wiri venture is part of the company’s “quarry end use” programme.
Mr Binns said it added $42 million to the company’s results this year and could deliver average earnings of about $10 million a year for the next decade.
“We are being smarter with our assets and using the land more effectively.”
Mr Binns believes the land will sell relatively easily in spite of buyers retreating from development land in the current downturn because of the relative shortage of zoned industrial land in the Auckland area.
“We are unlocking land with a zoning that allows heavy industrial businesses. Zoned industrial land of this magnitude that can be bought on the open market in big blocks doesn’t exist in Auckland. You only get one shot as this sort of development in any environment.”

[Hoop]

Has FBU, (NZ's 3rd biggest listed company) got the Brierley disease?

History has seen Brierley wrestle with Thistle Hotels and GPG wrestle with Coates, neither scenario has been a successful outcome for long term shareholders.

Is FBU going to do "a Brierleys" with Formica?

Shareholders should remind Mr Ling of this at their Annual meeting. Good investors know when to pull the plug on a dud investment and take their losses and move on. Mr Ling is paid big dollars to make the "right" decisions ... To orginally buy in and now wrestle with Formica the right decisions???

Hoop was amazed they bought this patient (just out from the intensive care unit) in the first place.



Formica in spotlight for Fletcher

4:00AM Tuesday Nov 11, 2008
By Anne Gibson (http://www.nzherald.co.nz/anne-gibson/news/headlines.cfm?a_id=39)


http://media.apn.co.nz/webcontent/image/jpg/ling7.jpg
Jonathan Ling could face tough questions at the annual meeting tomorrow. Photo / Paul Estcourt

Fletcher Building's annual meeting tomorrow could raise some thorny issues, especially over the company's ill-fated United States investment.
Matt Henry, Goldman Sachs JBWere analyst of Auckland, expects the meeting to give shareholders some guidance on future profit but he said Formica in the US had done poorly since Fletcher bought it last July for $1 billion.
About 400 people usually attend the meetings, held at The Langham, Auckland hotel on Symonds St.
Fletcher board members expected to front up to shareholders this week are chairman Rod Deane, chief executive Jonathan Ling, former chief executive Ralph Waters and directors Paul Baines, Hugh Fletcher, John Judge, Geoff McGrath, Sir Dryden Spring and Kerrin Vautier.
Sir Dryden is the oldest, aged in his late 60s, while Judge and Ling are the youngest, both listed at 54 in Fletcher's annual report. Henry ranks Fletcher a "buy' with a 12-month price target of $7.60 and a 12-month total return of 39.8 per cent.

Fletcher closed yesterday at $5.76, up 8c.
Formica's poor performance was due to market conditions which were worse than expected in North America and a failed execution of a big restructuring programme, he said.
"A marked deterioration in market conditions, particularly in Formica's three largest markets - US, Britain and Spain - will provide a significant offset to the operational improvements," Henry said.
Formica is confident it can fix its North American operating issues next year.
About 55 per cent of its revenue came from commercial work which remained relatively robust.
"House-building in the US peaked in March 2006 and has halved since then.
"It is unlikely the outlook will improve quickly; the US is tumbling towards recession with all supports weakening - house prices continue to fall, unemployment is rising and industrial production and consumer confidence are declining," Henry said.
"Goldman Sachs expects the weakness to be weighted in the sectors to which Formica is exposed: commercial [retail, warehouses] and office.
Both are highly exposed to credit availability, weak economic growth and declining prices."
Goldman estimated US commercial real estate prices could decline by 21 per cent to 26 per cent, Henry said.
In this year's annual report, Deane pointed to tough times ahead.
"We face very difficult markets in New Zealand, the United States, the United Kingdom and Spain, deteriorating markets in Australia and softening markets in Asia.
"There is little doubt that we are in for a tougher year than the one just experienced," Deane warned.
Fletcher faces a mixture of economic and market conditions which made it hard to predict the level of profitability in the June year.
* Fletcher Building's annual meeting is 10am tomorrow at The Langham, Auckland.

[Placebo]

Yeah, I like FBU but like Hoop I wonder whether Formica was one bite of the cherry too far.

Never mind Thistle and Coats, think Ansett Australia which nearly destroyed Air NZ and the Warehouse's ill-fated foray into the West Island.

[macduffy]

There is a difference in scale between FBU's purchase of Formica, which was expected to increase FBU's sales by about 17% on acquisition, and the much bigger impact that the purchase of Thistle, Coats and Ansett had on their new owners. From memory, I think that Thistle, for example, became about 50% of BIL's assets.
Unlike Hoop, I saw the Formica deal as an astute acquisition of " straw hats in winter" that would pay off as the cycle turns. I"m still optimistic that this is the case.

;)

[duncan macgregor]

There is a difference in scale between FBU's purchase of Formica, which was expected to increase FBU's sales by about 17% on acquisition, and the much bigger impact that the purchase of Thistle, Coats and Ansett had on their new owners. From memory, I think that Thistle, for example, became about 50% of BIL's assets.
Unlike Hoop, I saw the Formica deal as an astute acquisition of " straw hats in winter" that would pay off as the cycle turns. I"m still optimistic that this is the case.

;) I would think that now that FBU is being sued in the high court of America for 21 million over the formica business, that the sp will continue to downtrend. Bad timing getting into that business. Macdunk

[warthog]

The hog notes that Rod Deane appears to be presiding over yet another fiasco where an NZ company he is chairman of has embarked on a disastrous foray into a foreign market. Yes, Deane is surrounded by others who shared in the decision-making but the correlation between FBU and TEL is uncanny.

Ling is quoted in today's Herald as follows:

"If the whistleblower could have pre-icted the market demise, sub-prime crisis and what's happened to equity markets, then they're smarter than six billion other people."

The hog considers this a fatuous statement and therefore we must look behind its intent and the hog detects the seeking to discredit the so-called whistleblower by any means available.

[Hoop]

It seems Mr Ling has been shopping :cool:


REL: 1136 HRS Fletcher Building Limited ASSET:FBU: Agreement to acquire Fielders Australia Pty Limited Auckland
7 October 2008 - Fletcher Building Limited advises that it has entered into a conditional agreement to acquire all of the shares in Fielders Australia Pty Limited ("Fielders"). Fielders is owned jointly by Hills Industries Limited (60%) and FSR Investments Pty Ltd (40%) The agreement is conditional upon, amongst other things, due diligence, ACCC and FIRB approval, and the approval of Fletcher Building's board of directors. Based in Adelaide, Fielders provides roll formed steel building components to the Australian commercial, industrial and residential construction industries. The business has annual sales of approximately A$275M and employs 890 people across Australia. Mr Jonathan Ling, Chief Executive Officer of Fletcher Building Limited, stated that "Fielders is a well run business that has a solid reputation for performance with its customers. It would complement our existing business units in Australia and New Zealand." For further information contact: Philip King Paul Zuckerman GM Investor & Media Relations Chief Executive Steel Ph: 649 525 9043 Ph: 649 525 9152

Hmm nope he's not buying now

Quote 11 Nov post Hoop was amazed they bought this patient (Formica) (just out from the intensive care unit) in the first place.
It seems some of the the top management were also amazed as well.

Questions to Ling and Deans...Have you two guys just realised there is an world economic crisis happening? Where have you both been this last year? Certainly not with the 6 Billion other people...outer space maybe?

[macduffy]

Referring to Warthog's post.

Might as well lump Hugh Fletcher in with the "guilty men" for his leading role in Fletcher Paper acquiring, at a fancy price, some English paper manufacturer ( whose name escapes me now). All some time ago, of course!

;)

[Hoop]

Still no comments?

http://finance.yahoo.com/q/ta?s=fbu.nz&t=3m&l=on&z=l&q=l&p=m50%2Ce100%2Cv%2Cb&a=r14%2Css&c=

Fascinating picture (valid only today) ... TA comment appreciated - especially as regards the narrowing bollinger bands.

TIA.

Belg...it's becoming a lonely life on ST ....huh

Yes bollinger bands narrowing suggests a break in the short term (30days) trading pattern ($5.40 - $5.70 range). That is reinforced by the wedging effect happening with the RSI chart which points to the fact something has to give away (either up or down) by no later than late next week.
The WMA30 days (not shown) line is at 5.60 so if the shareprice holds above that figure that is promising. Also promising is the uptrending momentum indicator (not shown).
The OBV (not shown) show a continuing downtrend and low volumes which is not promising.

Overall there is enough evidence to suggest some sort of rally may? be forming. A rise today may break the short term (30day) downtrend line, if that happens it will help as well....touch wood

However not as excited as you yet Belg.. still a lot of negatives around.

Disc: Hold FBU

[duncan macgregor]

PLACEMAKERS have been caught selling sub standard timber in Auckland with about 1500 homes being effected. The suppliers reportedly rubbed off the red markings and changed the grade up. This wont do FBU or fletcher homes much good if it escalates into court battles for compensation. Macdunk

[GTM 3442]

Assumin', of course, that it's FBU doin' the rubbin' out . . . .

And if not, well maybe it'll rub off.

[kura]

PLACEMAKERS have been caught selling sub standard timber in Auckland with about 1500 homes being effected. The suppliers reportedly rubbed off the red markings and changed the grade up. This wont do FBU or fletcher homes much good if it escalates into court battles for compensation. Macdunk

I thought most Placemakers were owner operators under some franchise type deal ?

[winner69]

I thought most Placemakers were owner operators under some franchise type deal ?


Joint ventures with FBU majority ownership in most cases

[duncan macgregor]

Its along similar lines as Fonterra and the poisoned molk powder in China. Not Fonterras fault but it cost them heaps in the end. Try telling 1500 unhappy new home owners some of which are in fletcher homes that its not their fault. How long has it been going on and did i use some of their crap timber in the past and be held responsible? Macdunk

[bull....]

Still very bearish picture for fbu consolidating at lows between 5.4 support and 5.9 resistance a break of either will result in a short term move within the overall downtrend.
Favour the downside , the tightening bollingers mean a sharp move will occur soon.

As for the building industry in NZ what a joke first leaky homes now people being scammed on building materials makes you wonder why? anyone invests in new homes to start with.

[Placebo]

Maybe it's time to sell off FBU and cut losses, only to reinvest in the company making the rubbers? ;) I think not. We'll be ridding out this storm and be quite happy about it on the other end. :cool:

Well there are still many unknowns. Domestically, the Govt is making noises about infrastructure projects being brought forward, but what if road building stalls?
Credit has dried up on large developments; once those nearing completion are done, what then for the construction arm?

Domestic housing - banks showing increased reluctance to lend, slowdown in construction.

Placemakers revelation may be a small straw, but there are already many on the camel's back.

And that's just NZ. What about headwinds in other markets, AND facing a big bill over Formica.

No, best place at the moment is on the sidelines watching. Good luck Belgie et al, but I think you will need to be v patient.

[Lawso]

Formica seems to me to be the albatross round FBU's neck. The housing slump in the US must depress sales and hence earnings for at least another year. The time to buy FBU is not yet, IMO. Of course they paid far too much. Another boo-boo on Deane's watch.

[peat]

discl: sold all yesterday ... "nobody ever made a loss from booking a profit".

but just for the record there are studies showing that booking small profits will destroy a system that could have otherwise been profitable overall .

(not suggesting FBU is a buy or a hold - just commenting on trading strategies in general )

[Oiler]

Geez it just gets worse ... THE West Australian property market is being decimated following the evaporation of the resources boom, with values of $1 million-plus properties plummeting 20 per cent and the equivalent of more than two years' supply of homes flooding real estate agencies. (http://www.theaustralian.news.com.au/story/0,25197,24929833-2702,00.html)

That pipeline of work that FBU analysts keep talking about better thick and long as the residential pipeline seems to be contracting at an alarming rate in both Oz and NZ. The US residential building industry is completely moribund and has been so for about a year. In this instance, even though most analysts are saying this bad news is already 'priced in', I think they've underestimated the hit FBU is going to take.

Hope I'm wrong.

discl: don't hold.

Belgarion

I hope you are wrong.

FBU is more than a building co. in fact I think its name does the company a disservice having the word "building" in its name.

Look at there order book for infrastructure jobs, let alone the building projects. FBU are in the fortunate position of having a very full order book and can almost pick and choose the jobs they want to take on.
Infrastructure jobs have a big knock on effect to the greater company with things like cement, aggregates so on and so on .. even to owning the company that puts all those patterns on the barriers and walls along the Auckland motorways which all contribute to the bottom line.

I would venture to say that FBU has a problem getting qualified people into there construction/engineering group where all the action is.:eek::eek:

I have been buying up in the $5 range. For me it has a great yield and an even greater long term growth potential. A very well run/managed company.

Oiler

[macduffy]

Quite so, Oiler.

FBU stands to benefit from the cranking up of infrastructural projects which govts are planning to offset the worst of the recession. If they can recruit enough experienced engineers and other skilled labour.
One of the few companies on the NZX that I'm watching for a buying opportunity.

I wonder if Opus might be worth keeping an eye on too?

[Phaedrus]

Bollingers tightening again, triangle forming, RSI falling, still below 100 day MA, 50 day MA neutral.....Which way will it break?
FBU is in a trading range that has lasted for 3 months, so far. Within this, it is possible to find all sorts of signals and patterns that mean nothing until/unless FBU breaks above 615 or below 538. Right now, the flat OBV and mid-range oscillators give us no insight as to the likely direction of any future breakout. Therefore the trading range is more likely to continue rather than be broken, at least in the shorter term.

In downtrending stocks, oscillators usually give a string of premature buy signals as the downtrend continues. I have marked RSI "Buy" signals here with light-green arrows - you can see how it would be foolish to act on these in the absence of any confirmation from trend indicators.

If you hold a particular stock, it is all too easy to let your emotions colour and distort reality. We bend observations and perceptions to suit our position. For example, the light blue arrow marks the point at which a current holder of FBU stated "FBU seems to be in a uptrend now". Wishful thinking. Non-holders would have no difficulty seeing that FBU was in fact trendless and had been tracking sideways for months.

http://h1.ripway.com/78963/FBU119.gif

[winner69]

Phaedrus ... good you had the chart going back to its high .... just another remnder how TA, esp trends, keeps you in a stock when it is rising and out of a stock when it is declining even for long term investors eh, irrespective of the fundamentals

I recall you stating that even as a 'trader' a trade can last for years .... like FBU from 2001 to 2007 .... powerful stuff

There will be a time for FBU again ... just watch those charts

[winner69]

Quite so, Oiler.

FBU stands to benefit from the cranking up of infrastructural projects which govts are planning to offset the worst of the recession. If they can recruit enough experienced engineers and other skilled labour.
One of the few companies on the NZX that I'm watching for a buying opportunity.

I wonder if Opus might be worth keeping an eye on too?

Agree FBU can benefit from Govt spend on infrastructure ... should result in more activity for them and hopefully at a profit

However even FBU management are slightly cynical of Govt intention ... one i was talking too recently said unless the Govt pulls finger we'll all be watching the World Cup at Eden Park on beer crates

Besides that the main concern is FBU exposure to global economies, esp Aust and US where the pain is really just starting to hurt

[Hoop]

Looking at the Substantial Share Holder notices from last year ...

Macquarie Group - Out
Axa - Out
Westpac - Out

Any I've missed?

Being in the middle of possibly the biggest financial crisis for 70 years, one has to ask the question ...Have these financial institutions sold out because FBU is not performing up to their expectation ..or..have they been forced to sell out to meet their cash flow obligations.

[QOH]

I bought some FBU today at $5.56, had hoped to flick them off by the end of the day but wasn't worth it.

[Oiler]

[quote=belgarion;240615]Yankiwi, for your sake I hope I'm wrong. 5.62 average looks pretty safe over the longer term though. Could be a famous entry point. We'll see. BTW 70% in one stock in today's turbulent times is very balls'ee indeed. Hats off to ya - bigger conjoles than me. quote]

Belgarion I think in this market we need to be selective in what we buy, or as you say have the "cajones" to actually do it.

I have the cajones to buy FBU in the $5 range with a medium to long term investment horizon as Yankiwi is doing. :D

Not so keen on having 70% in one stock though :eek::eek:

Oiler

[winner69]

Sorry guys. I just don't buy the 'its already factored in' or the 'committed pipeline of work' arguments ... More bad news from across the ditch ...

Building approvals slump despite deep rate cuts (http://www.theaustralian.news.com.au/business/story/0,28124,24887206-25658,00.html)

Layoffs loom in building industry (http://www.theaustralian.news.com.au/business/story/0,28124,24889988-5018011,00.html)

Many compare Boral BLD.ASX and FBU ... similar sort of businesses ..... exposed to US markets

And most say BLD have many problems to overcome ... same ones as FBU in many respects .... worth while having a look at BLD background

[Tanger]

FBU has just dropped from $5.80 to $5.48 in the last 20 minutes. A 5.5% drop, with no news??? Either someone is jumping out, or there is about to be some news. Anyone heard anything?

[bull....]

boral slashes nearly 50% from profit outlook due to deteriating markets esp us

not good for fbu expect down grade at some stage

[Tanger]

That would do it. Interesting that a lot of the analysts have already built in a 30% reduction in profits this year after the guidance at the AGM for FBU. Will be looking with interest for any update on trading conditions from FBU prior to year end.

[Dr_Who]

This is very bad news for FBU.

The problem now is not the fact BLD has a 40% downgrade, but how deep will this rot go? If the US cannot get themselves out of this recession, then there could be further downside. I see Bill Gates giving a speech saying that it can take 10 years to see any signs of a recovery.

Analysts will go over BLD's numbers tonight and probably downgrade FBU. I am wondering if FBU will cut div payment. Anyone with the numbers can advice?

[Dr_Who]

My chart says FBU will test $5.00 support level soon. If it breaks, then it can go lower.

I am no charting expert, so please view the chart yourself. Maybe a charting pro like PHaedrus be kind enough to give us his expert opinion.

[Phaedrus]

FBU remains range-bound and is of little technical interest until/unless it breaks above $6.15 or below $5.38. Don't go holding your breath, though - trading ranges can sometimes last for a very long time. The falling OBV and RSI point to further short-term weakness.

For those wanting entry into this stock, an upside breakout would be a buy signal, especially if accompanied by significant volume.

For those holding FBU, a downside breakout would be a Sell signal, especially if accompanied by significant volume.

http://h1.ripway.com/78963/FBU128.gif

[duncan macgregor]

PHAEDRUS, On a personal note i know you were holding at what level did you get out?. FBU are in a downward spiral thats my prediction for the future. The building game is being shot down the results will follow. This sector in the market is one to avoid.
Macdunk

[Dr_Who]

PHAEDRUS, On a personal note i know you were holding at what level did you get out?. FBU are in a downward spiral thats my prediction for the future. The building game is being shot down the results will follow. This sector in the market is one to avoid.
Macdunk

Thanks Macdunk. I do respect your comments, esp when you come from the building industry. Also thanks to Phaedrus for the graph. I personally think that the risks is more on the downside than the upside. All fundamentals are pointing to a worsening construction sector and long term recessive environment.

Have you had a look at the 5 year graph? It does show a long term downtrend.

[winner69]

That would do it. Interesting that a lot of the analysts have already built in a 30% reduction in profits this year after the guidance at the AGM for FBU. Will be looking with interest for any update on trading conditions from FBU prior to year end.


..... and prob the same analysts had previously 'built in' a pretty big drop in BLD profits .... but the share price still went down 20% yesterday

I feel that it is not what they forecast for this year that sppoked the market ... it was more that the longer term outlook is getting worse ..... and a lot of the factors that affect BLD also affect the prospects over the next 2-3 years of FBU

[Phaedrus]

PHAEDRUS, On a personal note I know you were holding FBU - at what level did you get out?.

You've already asked me this Dunc.

I answered here. (http://www.sharetrader.co.nz/showthread.php?p=184252#post184252)

I do not hold any FBU at the moment.

[Dr_Who]

Some stockbrokers have a SELL recommendation on BLD :eek::eek:

[Oiler]

Some stockbrokers have a SELL recommendation on BLD :eek::eek:

Dr ???? I dont think stockbrokers sell recommendation on BLD has any bearing on FBU. :rolleyes::rolleyes:

I love the dividend yield ..10% :D and at these prices I will continue to buy.
Oiler

[AMR]

Some stockbrokers have a SELL recommendation on BLD :eek::eek:

Then again some brokers had BUYS on PEM, BNB, AED, etc...let's start listening to them.
http://i145.photobucket.com/albums/r217/princejellyfish/borat_not.jpg

[Dr_Who]

Dr ???? I dont think stockbrokers sell recommendation on BLD has any bearing on FBU. :rolleyes::rolleyes:

I love the dividend yield ..10% :D and at these prices I will continue to buy.
Oiler

I dont think they can sustain the div. Just have to look at BLD to know where FBU is heading.

FBU net debt is $1.85 billion.

[Dr_Who]

Looks like BLD is testing the support level of $3.20. Wonder if the support will hold. I see FBU sp going the same direction as BLD.

[Dr_Who]

U.S. Economy: Manufacturing Shrinks Further, Spending Falls

Today’s construction report showed that the collapse in residential building may be spreading to commercial properties. Nonresidential construction slid 0.6 percent in December, the biggest drop since July. Total building fell 1.4 percent in the month, capping the worst year on record.

http://www.bloomberg.com/apps/news?pid=20601087&sid=azMVfMZ95Pxo&refer=home

[Phaedrus]

YK, FBU is still in a trading range after a downtrend. Statistically, the odds of an upside breakout from this are 43%, a downside breakout 57%. This is not all that far off "coin-toss" material, but nevertheless, the odds do not favour your position. This is fairly late on the day to be thinking of pulling out, though. If you wanted out, you should have got out sooner. At this stage you might perhaps prefer to hang in there and hope against hope for good half-year results......

Technically, I can see no pointers as to the likely direction of the breakout, so TA is of no use to you right now, other than to show that statistically you are probably on the wrong side of this one.

It's wait-and-see time for FBU and I can't pull a magic chart out of my hat that will tell you what to do.

Why did you buy FBU? Do those reasons still hold? If so, you should shoulder the results of your decision-making process like a man and hang tough..... unless/until FBU breaks down in which case you should be out of there right smartly.

[macduffy]

I wouldn't be selling just yet.
Aust govt looking to pump large amounts of $$$ into home insulation and NZ govt making similar soothing noises. Add that to the spend up on infrastructure projects in both countries and FBU looks like a major beneficiary.


;)

[Dr_Who]

This article tells me Formica is worst than what the market is expecting.Also give the market little confidence FBU can put together a deal. Looks abit like AIR's deal in Ansett.

Fletcher accuses Formica seller of fraud

http://www.stuff.co.nz/4836909a13.html

[Placebo]

This article tells me Formica is worst than what the market is expecting.Also give the market little confidence FBU can put together a deal. Looks abit like AIR's deal in Ansett.

Fletcher accuses Formica seller of fraud

http://www.stuff.co.nz/4836909a13.html


At least FBU have the balls to go after them. A pity the shareholders in FTX were left holding the baby after a dodgy private equity mob flogged it off, aided and abetted by those scalliwags at Forbarr...

[The Doctor]

a huge burden...paid far too much...Fletchers latest 'Int Paper millstone'.Sub $5 coming up.

[Dr_Who]

BLD $2.95 :eek:

[Dr_Who]

FBU $5.61 ATM :D

DW. Is there a thread for BLD on the ASX board? As far as I can see this thread is for FBU. :rolleyes:

I dont mean to spook you YK, but my theory is that BLD is a time machine for us to see what can potentially be for FBU. Hey who knows, I can be wrong. Lets just see what they say in the up coming hlf profit.

[winner69]

I dont mean to spook you YK, but my theory is that BLD is a time machine for us to see what can potentially be for FBU. Hey who knows, I can be wrong. Lets just see what they say in the up coming hlf profit.

Right on DR .... its not just that FBU and BLD have similar sort of operations the main factor is that the movers and shakers .... the analysts and the instos are all based in Australia ..... and have both in the same peer group ..... and DO see them in the same light ..... it is inevitable that snetiment is aligned

[Dr_Who]

Does anyone now if FBU debt is in USD or NZD?

It concerns me that FBU raised debt in USD to finance Formica. Will there be a ratings downgrade if FBU profit drops?

[Hoop]

Does anyone now if FBU debt is in USD or NZD?

It concerns me that FBU raised debt in USD to finance Formica. Will there be a ratings downgrade if FBU profit drops?




Hi DR

it seems only some is in US$

Quotes from Annual Report 2008

...During a tight liquidity market in 2008 the company replaced the bridging
finance used to buy Formica with a United States debt issue with 10 to 12 year...

Total debt $NZ1846M as at 30 June 2008

also in explanatory notes....
Foreign Currency exposure risk
640M ...NZ$
693M.....A $
405M.....US$
73M......EURO
39M......GBP
adds up to 1850M:) I guess the numbers are in NZ$

Don't know just how useful this data is in assuming FBU is worse now, (due to the recent drop of the NZ$) as they have hedging strategies....I guess we will know very shortly.

Disc: hold no shares.

[macduffy]

Does anyone now if FBU debt is in USD or NZD?

It concerns me that FBU raised debt in USD to finance Formica. Will there be a ratings downgrade if FBU profit drops?

Of course, raising debt in USD would have been seen as a natural hedge at the time as the bulk of Formica's receivables (and profits) were in USD.
There could be a danger of debt covenants being breached as a result of the recent strength of the USD v NZD, depending of course on the terms of the borrowing.

[Dr_Who]

End of june the USD/NZD was at 77 cents and now 50 cents. I assume the NZD would have significantly dropped against all currency since then with the exception of the AUD.

[beacon]

It has indeed. And it is falling against the Aussie.

[Dr_Who]

According to my numbers FBU debt should be around NZ$2 billion due to the weakness of the NZD? This is a debt/equity ratio of 75%. This is not a small sum in a depressed market, esp with Formica a potential drag on FBU. FBU's interest ratio deteriorate?

Will be very interesting to see FBU half year announcement.

[Hoop]

According to my numbers FBU debt should be around NZ$2 billion due to the weakness of the NZD? This is a debt/equity ratio of 75%. This is not a small sum in a depressed market, esp with Formica a potential drag on FBU. FBU's interest ratio deteriorate?

Will be very interesting to see FBU half year announcement.

DR
my post #410 mentioned that FBU has hedging strategies!! so i will repeat my post #410... you simply can not just do currency conversion calculation ... FBU may have made a profit from their hedging and their debt maybe under $1846M ...then again.... they may have made a loss and be worse than $2B....we don't know yet.....also they have been buying so debt is probably higher

Disc hold none

[Dr_Who]

Looks like FBU could be in for a very tough year ahead.

Boral sees challenging second half

BORAL posted today a 44 per cent fall in first-half profit and warned the remainder of the year would be "particularly challenging".

Net profit declined to $75 million for the six months ended December 31, from $132 million a year earlier, Australia's largest building products maker said.

This was in line with Boral's downgraded guidance provided in late January.

But the result was below market expectations of $78 million, according to a poll of five analysts by Dow Jones Newswires.

Sales were $2.59 billion, down 1 per cent from $2.63 billion in fiscal 2008, and the company will pay an interim dividend of 7.5 cents, compared with 17 cents a year earlier.

Boral reiterated its full-year net profit guidance of $120 million, which it slashed last month by 40 per cent from its previous guidance of $200 million, because of further deterioration in the Australian and US housing markets.

"It is particularly difficult to forecast market activity at the current time, however, we are expecting the second half of the year to be particularly challenging," said chief executive Rod Pearse.

He also said that Boral's gearing had increased to 79 per cent at December 31, and in response to current economic conditions, capital expenditure this year of $250 million would be around half of last year's levels.

Mr Pearse said the firm's financial metrics remained well within its debt covenants, with no material refinancing requirements until August 2011.

"Based on our access to bank facilities and our financial position relative to our debt covenants, we have no requirement to raise additional equity nor are we contemplating doing so", said Mr Pearse.

Boral's profit growth has been hurt by a slowdown at home, where the housing market is in its fourth year of a downturn and operating at less than half of its peak, as well as the US slowdown and rising input costs.

http://www.theaustralian.news.com.au/business/story/0,28124,25039166-36418,00.html

[Nevl]

Looks like FBU could be in for a very tough year ahead.

Boral sees challenging second half

BORAL posted today a 44 per cent fall in first-half profit and warned the remainder of the year would be "particularly challenging".

Net profit declined to $75 million for the six months ended December 31, from $132 million a year earlier, Australia's largest building products maker said.

This was in line with Boral's downgraded guidance provided in late January.

But the result was below market expectations of $78 million, according to a poll of five analysts by Dow Jones Newswires.

Sales were $2.59 billion, down 1 per cent from $2.63 billion in fiscal 2008, and the company will pay an interim dividend of 7.5 cents, compared with 17 cents a year earlier.

Boral reiterated its full-year net profit guidance of $120 million, which it slashed last month by 40 per cent from its previous guidance of $200 million, because of further deterioration in the Australian and US housing markets.

"It is particularly difficult to forecast market activity at the current time, however, we are expecting the second half of the year to be particularly challenging," said chief executive Rod Pearse.

He also said that Boral's gearing had increased to 79 per cent at December 31, and in response to current economic conditions, capital expenditure this year of $250 million would be around half of last year's levels.

Mr Pearse said the firm's financial metrics remained well within its debt covenants, with no material refinancing requirements until August 2011.

"Based on our access to bank facilities and our financial position relative to our debt covenants, we have no requirement to raise additional equity nor are we contemplating doing so", said Mr Pearse.

Boral's profit growth has been hurt by a slowdown at home, where the housing market is in its fourth year of a downturn and operating at less than half of its peak, as well as the US slowdown and rising input costs.

http://www.theaustralian.news.com.au/business/story/0,28124,25039166-36418,00.html

Rebuilding and the infrastructure investment both here and in Aussie will provide a floor for FBU so things won't get worse. The question is when will they get better? Anyway if they maintain profit then it will be a pretty good investment just based on divi's. Ready for growth in 2010 and onwards.

[Dr_Who]

BLD cut the div from 17 to 7.5cps. That is a 55% div cut.

[Oiler]

Rebuilding and the infrastructure investment both here and in Aussie will provide a floor for FBU so things won't get worse. The question is when will they get better? Anyway if they maintain profit then it will be a pretty good investment just based on divi's. Ready for growth in 2010 and onwards.

Nevl

I am with you. FBU are in prime position to benefit from the infrastructure spending. They have long been in infrastructure and are seen as the frontrunners.

I have a lot of confidence in FBU management

FBU have a very "savvy shrewd" treasury dept and have tight control on there foreign currency exposure.

The TA fraternity may not see FBU as a buy, but for me as Buffett follower I am accumulating at these prices.

The glass is just over half full :D

Oiler

[Dr_Who]

I have a lot of confidence in FBU management

Oiler

Does your confidence extend to the Formica $1 billion buy that turned out to be a dog. Formica for FBU is abit like Coates for GPG and Mt Charlotte for BRY. Formica is the huge rock on FBU's shoulders dragging them under water.

U.S. mortgage applications tumble, trade gap shrinks

http://uk.reuters.com/article/globalClimate/idUKN1135904420090211

[winner69]

http://www.directbroking.co.nz/directtrade/dynamic/announcement.aspx?id=2160624

Key Points
- Group sales up 6 percent to $3,757 million
- Group net earnings down 27 percent to $172 million
- Operating earnings down 23 percent to $303 million
- Cashflow from operations down 15 percent to $208 million
- Earnings per share down from 47 cents to 34 cents
- Capital expenditure up 16 percent to $162 million
- Interim dividend of 24 cents per share with partial New Zealand tax credits

Belgarion asks ... And the outlook? ... Mr Ling responds:

"Looking forward, our current plans have as a base assumption lower activity
levels, and in response to this we have a range of further cost reduction
initiatives underway. Additionally, we are working to ensure that we scale
manufacturing production volumes to meet expected demand levels. We have a
strong financial position and we are focused on maintaining this and
preserving financial flexibility," Mr Ling said.

Does he mean "even lower than now"?

Of course not Belg ........ about the same as now

Puts FBU on a PE of 8 to 9 times this years earnings which still doesn't them particularly cheap

Be interesting what they say an an analysts briefing .... but then the quality of analysts left in NZ is getting pretty poor so don't expect any searching questions

Still good for the dividend will keep the shareprice up

Don't think you'll get your wish of a sudden dive in the shareprice belg

[Dr_Who]

Maybe a big writedown in the full year?

Not a bad result for now.

[Snow Leopard]

... And the outlook? ...

Full(er) announcement here (http://www.fletcherbuilding.co.nz/media/MediaPDF/Half%20Year%20Results%20Announcement%20.pdf)

regards
Paper Tiger

[Placebo]

Seems an overly-optimistic outlook if you ask me. Ling seems to be saying they haven't factored in the possibility things might get worse.

Woeful performance by Formica. Have they bought an albatross?

Odd they have kept the divvie high while the CEO says it's important to retain cash. If it's that important, I am sure holders would forego their dividend to protect the long-term viability of the company?

[Fortescue]

So when will somebody accept the responsibility for buying that dog of a business Formica? A higher multiple was paid for it than Laminex, which even with its privileged market positions was only making cost of capital, and the downturn in the US market was obvious at the time the deal was done - also it was a business which has gone broke some 3 times in the last 15 years, and has recorded dropping volumes consistently over the last ten years as newer technologies compete with its 1912 HPL technology.

Ling and the Board just shrug their shoulders and make out they couldn't know better - that is patent rubbish and begs the question of what justification do they have for being in their roles!

[Nevl]

so basically a holding pattern for the moment. Surprised to see the Divi hold up and will be interesting to see if they get the Kopu Bridge or any of the schools that JK announced. Also another 4bill of infrastructure spending over the next 4 years. Not to mention over 1000 houses to be built in Aussie and Rudds massive stimulus. Is Fletchers inline for any of that?

Could be time to take a small position. I think the floor has being meet or within 15% of it. The Albatross is of course Formica. I mean really even i think it is tacky and very 70's. What were they thinking!! Hopefully it can be flogged off to some other sucker.

[Hoop]

According to my numbers FBU debt should be around NZ$2 billion due to the weakness of the NZD? This is a debt/equity ratio of 75%. This is not a small sum in a depressed market, esp with Formica a potential drag on FBU. FBU's interest ratio deteriorate?

Will be very interesting to see FBU half year announcement.

Doctor, congratulations you were spot on with the with that Debt figure of $2 billion ($2.003B to be exact up 23%)

Unfortunately you were a just a "tad" out with your 75% D/E ratio.. it was actually 41.3% (up only 4%!). Disc: -I tried my best to make your error sound minor.

Not a good result for the "doom & gloomers".... but don't despair.......... for there is some good news coming for you folk.....STU report expected very tough times from here on to impact their profits in the second half, the steel profits are a goneburger so STU and FBU can't rely on this sector to buoy up their profits in the second half as it did in this first half.

[Lawso]

It's an ill wind that's blown bad for Victorian homeowners but it must blow good for the construction industry. FBU is so deeply into the sector that it must benefit, ditto with STU from infrastructure spending here and in Oz.

[Nevl]

It's an ill wind that's blown bad for Victorian homeowners but it must blow good for the construction industry. FBU is so deeply into the sector that it must benefit, ditto with STU from infrastructure spending here and in Oz.

Well with 69 new houses here and 10000 being renovated for HousingNZ and more than 1000 houses in Aussie plus I heard 95 municipal buildings destroyed. Actually not too sure how much will be rebuilt as the Aussie market has an oversupplied housing supply. Anyway the Macro economic effect could be quite large once people start getting back on their feet. Would be selling insurance companies though.

[Oiler]

[quote=Hoop;.
Not a good result for the "doom & gloomers".... but don't despair.......... for there is some good news coming for you folk.....STU report expected very tough times from here on to impact their profits in the second half, the steel profits are a goneburger so STU and FBU can't rely on this sector to buoy up their profits in the second half as it did in this first half.[/quote]

Hoop not sure why are saying that the steel profits are a "goneburger". FBU will use a hell of a lot steel with there infrastructure work.

I have heard Jonathan Ling speak several times and to me he is not a bulls**t type of guy. He tells it like it is.

I was ready to buy today, with the doom and gloomers trying to push the price down. It didnt happen so my buy order has only been partially filled.:mad:

Yankiwi it's not "groundhog" day yet, so you may have to wait another month ;) to "to get more at bargain prices"

[winner69]

Doctor, congratulations you were spot on with the with that Debt figure of $2 billion ($2.003B to be exact up 23%)

Unfortunately you were a just a "tad" out with your 75% D/E ratio.. it was actually 41.3% (up only 4%!). Disc: -I tried my best to make your error sound minor.




Bit unfair on the DR there mate

Debt:Equity is actually 73% so the DR was pretty close

The ratio FBU use is Debt/(Debt + Equity) (you need to read the footnotes)

Whilst the 43% is a better reflection of Debt to total capital invested many do use the ratio that Docter uses

I'm sure he will understand

[_Michael]

so basically a holding pattern for the moment. Surprised to see the Divi hold up and will be interesting to see if they get the Kopu Bridge or any of the schools that JK announced. Also another 4bill of infrastructure spending over the next 4 years. Not to mention over 1000 houses to be built in Aussie and Rudds massive stimulus. Is Fletchers inline for any of that?

Could be time to take a small position. I think the floor has being meet or within 15% of it. The Albatross is of course Formica. I mean really even i think it is tacky and very 70's. What were they thinking!! Hopefully it can be flogged off to some other sucker.

Fletchers is set to be the biggest winner from the Aussie funded ceiling insulation roll-out, market in which FBU have 60% market share in AU!!

"The Rudd Government will install free ceiling insulation in around 2.7 million Australian homes."

BUY :D

[Nevl]

Fletchers is set to be the biggest winner from the Aussie funded ceiling insulation roll-out, market in which FBU have 60% market share in AU!!

"The Rudd Government will install free ceiling insulation in around 2.7 million Australian homes."

BUY :D

Well it costs about $500 per house so thats not a bad bonus. Will provide a good boost the company.

[Hoop]

Bit unfair on the DR there mate

Debt:Equity is actually 73% so the DR was pretty close

The ratio FBU use is Debt/(Debt + Equity) (you need to read the footnotes)

Whilst the 43% is a better reflection of Debt to total capital invested many do use the ratio that Docter uses

I'm sure he will understand

Apologies DR...It appears I was on the wrong wavelength..glad I wrote it in small print ;)

[Dr_Who]

No worries mate.

The reason I post here is to make sure I have my numbers inline. It is good investors like yourself and Winner that participate to make sure I check and get my numbers and get it right.

I dont disagree that FBU is a good company with good management. My concern is the forex exposure, large debt, Formica and a recessive construction sector. Hopefully FBU can obtain some of the govt contracts being handed out. We know that there are a number of construction Co out there fight for a small piece of pie.

Good trading everyone.

[POSSUM THE CAT]

Agree with Belgarion

[winner69]

Criterion The Australian has FBU as a BUY


http://www.theaustralian.news.com.au/business/story/0,28124,25046425-23634,00.html

[Toulouse - Luzern]

Oz - FBU will benefit from oz stimulus pkg - eg pink bats - Dompost today

[macduffy]

Oz - FBU will benefit from oz stimulus pkg - eg pink bats - Dompost today

Good to see the old Dom latching on to something that this thread was discussing the best part of a couple of weeks ago!

;)

[moimoi]

Insulation only accounts for 2 per cent of Fletcher's earnings

[Oiler]

And I'd add that FBU's NZ market, which posters are touting is going to benefit from NZ govt stimulus, is a fraction of the Oz market which is experiencing a considerable downturn. Once that divie gets paid it will resume it downtrend ....

Belg

The Engineering group have over $1B on there books (big cash flow) without the govt stimulus package. This will spillover into Cement,Aggregates,Steel, etc. all FBU cos.

The NZ and AU govt. stimulus will have an impact on FBU earnings, even Pink Batts

FBU run a very tight ship :cool::cool:

Dont underestimate....todays FBU is very different to 10 yrs ago.

Oiler

[AMR]

Good going , Phaedrus would be proud of you :)

[QOH]

I've found FBU to be an excellent trading stock, the last 6 weeks or so. Back in today, although I concede I was an hour too early. If I can't get out with a reasonable profit quickly this time, at least the div is due soon.

[Seiya]

When is the div due?

[QOH]

When is the div due?

Early April I think, probably go ex div mid March.

[Phaedrus]

I've found FBU to be an excellent trading stock, the last 6 weeks or so. Back in today, although I concede I was an hour too early. If I can't get out with a reasonable profit quickly this time, at least the div is due soon.
On the contrary, QOH, I am genuinely astonished at your prowess. A quick look at the chart shows us that FBU has meandered more or less sideways for the last 6 weeks, so I am astounded that you have found it to be "an excellent trading stock" over this time. The chart here shows a few of the more common short-term technical indicators applied to FBU, along with their associated buy signals (green arrows) and sell signals (red arrows). The results are as disappointing as you would expect from such a trendless stock :-
Williams'%R :- One losing trade.
Relative Strength Index :- No signals generated.
MACD :- Two losing trades.

http://h1.ripway.com/78963/FBU218s.gif

What is your secret? What system/indicators are you using? What actually triggers your buy and sell decisions? Why, specifically, did you buy today?

Good luck with your latest entry - the short-term outlook for FBU doesn't look all that good to me.

You are an interesting and unusual specimen, QOH. A gun super-short-term trader that buys and holds for dividends!

[winner69]

I bought some FBU today at $5.56, had hoped to flick them off by the end of the day but wasn't worth it.

That was a week or so ago ... hope you not holding these still mate

[QOH]

That was a week or so ago ... hope you not holding these still mate
No sold them, think I've been in twice since then. Ok I don't claim to be making huge money but I'm happy buying around $5.55 and getting out at $5.75 to $5.80 if it only takes days rather than weeks. Sure I'm only making a few hundred each time after brokerage but it beats going to work for me, and is more than I'm going to get from a bank nowadays.
Today I may have made a mistake (5.40) buy, but if they make $5.65 in next few days I'll get out. If not at least I can get the dividend.
It's the only way I can seem to make anything at the moment, little profits and often.

[QOH]

You asked me why I bought today. My only excuse it that they were 35 cents cheaper than what I sold them for on Friday. I'm not claiming to be a super trader, just trying to make a few dollars pocket money. I'm happy with any little bit I can get in these markets.

[Dr_Who]

Ive been negative on FBU for sometime now.

Too much debt on their books and further deteriorating environment.

[Phaedrus]

I understand, QOH. Good luck! :)

[Phaedrus]

Remember FBU is a cyclical stock, the down cycle is only just starting...... Only just starting? I think you have been smoking more than cubans, SC! FBU ended its uptrend way back in 2007!!!! Perhaps you have only just noticed!


Of course none of this spiel means anything to you TA guys, but you're all about to lose your shirts anyway, your systems only work in a rising market What nonsense! TA would have got you out of FBU in 2007 and has worked superbly well in the ensuing downtrend. You might like to explain how "TA guys are about to lose their shirts" when most are largely out of the market and have been for some time. It is the people that didn't realise the Bull market had ended that have lost their shirts, buddy. Those with no exit strategy.

SC, you go on to make a lot of silly unsupported assertions that are not worth responding to. Take a look at this longterm FBU chart, though, and it should be obvious even to you that TA works well - whether the trend is up or down.

Anyone utilising kindergarten level TA would not need to be reminded of the fact that FBU is a cyclic stock - neither would it take them over a year to realise that the trend had changed!!!

http://h1.ripway.com/78963/FBU223.gif

[Phaedrus]

(Trading range breakout)... but not acompanied by significant volumes ..The break below the trading range was made on significant volumes, Belg - about double the usual, in fact. (see Magenta circle)


...mainly terrified Mums and Dads? Look at the OBV plot. See how it continues to fall? FBU is still being distributed. In other words, larger holders are still selling to smaller holders. It's the little guys who are buying, Belg - not selling. (This is bearish)

We should not be too surprised that the breakout from this trading range was downward. As noted in post #398, the odds of this happening were 57%.

OBV is a leading indicator - in other words its signals generally precede price based indicators. See how the August "buy" signal was forshadowed a month earlier by the OBV "buy" signal.

See how the tentative November "buy" signal was NOT confirmed by the OBV?

Neat eh?

http://h1.ripway.com/78963/FBU33.gif

[winner69]

Suppose QOH still holding the 540 ones she bought .... waiting for the dividend now

[Dr_Who]

Why are you still holding this share YK?

[Dr_Who]

$5.65 ATM / $5.11 ave (9th & 10th March) = 10.5% in 18 days :D (213% APR)

Why are you not in it Dr?

I am please you are making money YK. Good on ya mate. :)

[Oiler]

Thanks for that Dr.

Looking like I might have to sell BEFORE my first ever div payment. I'm thinking the s/p will fall back a good bit after Wednesday. Wouldn't that be the normal?

Yankiwi
We seem to have a similar philosophy to investing in shares :eek: I would expect the share price to drop on Wednesday.

I have bought over the last 6 months a "chunk" of FBU shares on margin at an average price $5.35 (not heavily margined around 65%)

The interest costs on my margin account have been more than covered by the dividend payment to date. To me FBU are well positioned to capitalise on the Key and Rudd initiatives to ride us out of this "meltdown"

I am going to hang in and will continue to buy as I believe in the long term FBU.
Oiler

[Betterwork]

Hi all.. I have been lurking here for a while... First post! I'm glad I got in at 5.47... Apart from EX-Div date tomorrow is there any reason for such a massive increase?

[winner69]

Hang on to your hats!

FBU $6.00 ATM :D

.... those with sense of humour would say ACC are buying .... but not many selling ... amazing what happens when confidence comes to the market ... the worlds woes are over

[bull....]

A classic bear trap as some would say.

[QOH]

Suppose QOH still holding the 540 ones she bought .... waiting for the dividend now

No winner flicked them just now for 600. Sure it took me exactly a month this time, but still happy with the trade. I'll take anything in these markets.

[winner69]

I'm out now too @ $6.00

Covered the losses from my first entry stop loss being hit and put me back in profit for FBU :D

I'll probably jump back on board during the next dip, which might be tomorrow ;)

Good luck holders

Yankiwi ..... won't Phaedrus be disappointed in you .... didn't he say let your profits run

And yesterday you were so excited at losing your virginity and getting your first dividend ...... wasn't today the record date

[winner69]

No winner flicked them just now for 600. Sure it took me exactly a month this time, but still happy with the trade. I'll take anything in these markets.

Well done QOH .... good 10% there eh

[Anna Naum]

The chart on FBU looks interesting, but then I am sure there are those who know more about charts who might want to give guidance here.

[bull....]

The share is back in its previous trading range , hence the referral to bear trap.

bear trap - An accumulation of shares being sold short by bears trying to drive down the price of a stock. The bear trap occurs when the bears find they must repurchase the shares from an individual or a group at an artificial price determined by the seller.

Maybe this was the bot selling lol

Anyway the false break of the range was not a valid break so price action that has occurred is not unexpected.

[lissica]

If anyone is interested, FBU record date is 18 March (Next Wednesday)

With a $.201 cash per share divie, you can buy as few as 150 shares with effectively no brokerage fee.


I believe it's 24c per share with 6c imputation credits for NZ holders.

Picked up a few FBUIZA for 31c. I figured the divvie almost covered the warrants even if it were to expire out of the money on 30 March. Fingers crossed this thing rides a bit higher first.

[Phaedrus]

The chart on FBU looks interesting......
Sure does. The situation :-
(1) First we had a trading range. The odds that this would be broken to the upside were 43%, downside 57%.
(2) Then we had the "expected" downside breakout, as favoured by the statistics.
(3) This breakout then failed as prices moved back within the trading range again. Breakouts fail like this about 17% of the time.
(4) At this point, you might perhaps think that the odds are the same 43/57 that they were before, but they are not - in fact they have changed quite dramatically. The odds that the (resumed) trading range will break "up" are now 64%, and down 36%. Quite different huh?

So, how would an active, switched-on trader use these signals?
(1) They would go short just as soon as the trading range was broken to the downside.
(2) They would close out the short just as soon as the breakout failed (purple arrow) - a losing trade.
(3) They would simultaneously reverse their stance and go long, giving an entry at $5.45, confirmed by the OBV trendline break.
(4) They would regard this as a relatively low risk entry because of the proximity of support and because the odds of further upside action are about 2:1.

http://h1.ripway.com/78963/FBU318.gif

[Phaedrus]

YK, What have you done? You have sold just below a previous resistance level. Is this ill-advised? Definitely not. It is, in fact, a sensible move for a short-term active trader. If that cap fits, wear it.

Those that bought at the purple arrow would fall into two main groups.
(1) Short-term traders wanting to trade the range (as above).
(2) Longer-term players, counting on the favourable odds and hoping for a breakout above the previous resistance level. They would continue to hold, so long as the lower support level remains unbroken.

Your "scenario" is not unreasonable and as you say, you will either be right or wrong - it depends on a roll of the dice. The question is "are the dice loaded in your favour?" because if they are not, you are just gambling.

Some personal advice, though. Don't even try to be a hero. Don't try to buy at the bottom or sell at the top. Don't try to "call" the market.

Neither should you consider any mistake as "egg on your face". You must expect to make a significant number of mistakes and any system, no matter how good, will give a proportion of failed trades. The only true failure is when you do not keep to your system. Or ignore the market. Or refuse to accept the possibility that you might be wrong. Or trade on impulse. Or are rude to your parents, or run with scissors, or

[K1W1G0LD]

Opened at 637 , so we'll see where the market takes us today .After the Dow surged 7% and more Govt roading contracts.

[Placebo]

Nice advice, Phaedrus. Best advice I ever got: If at first you don't succeed, don't try skydiving.

[Lego_Man]

Trading halt on FBU - theyre looking at raising some new equity. The question is what for?

[Dr_Who]

Trading halt on FBU - theyre looking at raising some new equity. The question is what for?

To reduce their huge debt to equity level or they will be downgraded by rating agency. FBU is finding it very tough out there and must reduce debt to continue. Div will also be cut. Not a good look.

[winner69]

Bit poor that trading halt was a few minutes late

[winner69]

To reduce their huge debt to equity level or they will be downgraded by rating agency. FBU is finding it very tough out there and must reduce debt to continue. Div will also be cut. Not a good look.

But Dr ..... even in these glum times FBU painted a very rosy picture even though included in the picture was

- a profit downgrade of 10% at least before 'further deterioation' in market conditions

- writeoff $150m of overvalued assets (impairment they call it)

- another $300m of one off costs restructuring

- slash 2nd half dividend to 14 cents

- writeoff $50m of tax benefits on the books ... bloody accountants made us do it

- 15% dilution of current shareholders interests (unless you one of the instos who partake in the placement)

Never mind most of the writeoffs are non cash so they don't count ... and gearing still at 35% even after all this

And cheap shares to be had again at $5.35

Good stuff - at least they did something before the market cottoned on ... unlike some other iconic NZ companies

[winner69]

I'd be quite upset if I had bought some between the first ann @ 10:04 and the halt @ 10:09

Am I wrong to think that the halt should have happened first?

You would think so .... they didn't just make up their mind at morning tea did they

[lissica]

You would think so .... they didn't just make up their mind at morning tea did they

I guess it is April the 1st

[Morpheus]

Seems you're not alone Winner

http://www.nbr.co.nz/article/heavy-selling-preceded-fletcher-building-trading-halt-98323

[beacon]

Looks like i must say goodbye to Nz shares completely. Rampant insider trading, small easily manipulated market, non-communicative and toothless exchange, small economy ...

[winner69]

Whats interesting is the 5% plus drop late yesterday afternoon on pretty high volumes ..... even though there was pretty solid buying the day before .... maybe feeble attempt at getting the VWAP up so they didn't have to discount the offer too much.

Whatever getting away (if they do) with a 10% discount on yesterdays price is pretty good effort

[The Doctor]

just imagine how they'd be travelling without the 'grand gesture' of buying Formica!!!

[Bob Marley]

Belgy mon
Record date for SPP = 8 April 2009 (see yesterday's preso)

[Bob Marley]

Belgy mon - from yesterday's full announcement:

"The Company has received advice from the New Zealand Securities Commission that a Securities Act exemption will be granted, and has received a waiver from the NZX, so that shareholders will be able to subscribe for up to NZ$11,500 worth of shares rather than the lower level of NZ$5,000 which is currently prescribed."

[lissica]

Belgy mon - from yesterday's full announcement:

"The Company has received advice from the New Zealand Securities Commission that a Securities Act exemption will be granted, and has received a waiver from the NZX, so that shareholders will be able to subscribe for up to NZ$11,500 worth of shares rather than the lower level of NZ$5,000 which is currently prescribed."

Just a favour to ask...I'm going travelling for a couple of weeks, and then back in Australia on 18 April. My mail get's sent to an address in NZ. Could someone please tell me when the SPP details arrives in the mail in NZ?

Thanks!

Liss

[winner69]

Sheppard the small shareholder advocate all peeved again ... special offer for the old boys club and small shareholders shafted again

Probably the likes of Waters (ex head honcho) and Masfen fall into this category

Fletcher board accused of 'arrogance' in capital raising

http://www.stuff.co.nz/business/2315611/Fletcher-board-accused-of-arrogance-in-capital-raising

[macduffy]

Sheppard's probably got a point but FBU has a lot of Australian insto shareholders these days and their modus operandi in this instance is pretty much standard practice there in current conditions.
It could be argued that FBU are not as hard pressed for capital as some of their counterparts but I imagine that they wouldn't want to take any chances on being able to attract the money, given the volatility in the markets.
At least small shareholders are not being overlooked completely, as happens sometimes.

[winner69]

Sheppard sort of apologises to FBU .... but raises a few good points that NZ companies with overseas debt may have refinancing difficulties in future.

Isn't just a NZ problem either ...... there apparently is $50 billion of overseas domiciled debt due to be paid this year alone by ASX100 listed companies .... and if foreign bankers keep their money at home pretty hard for local banks to make up the shortfall

Interesting

http://www.stuff.co.nz/business/opinion/stirring-the-pot/2317307/Fletcher-lesson-Its-time-to-print-money

[macduffy]

The Australians have been rather more vocal about the effect of foreign banks withdrawing from the local scene, probably because there were more of them operating there with a physical presence than there are/have been in NZ.

Interesting interview here with David Murray, Chairman of the Aussie Future Fund and former CEO of CBA.

http://www.businessspectator.com.au/bs.nsf/Article/KGB-INTERROGATION-DAVID-MURRAY-pd20090402-QPVMZ?OpenDocument&src=kgb

[Deev8]

The Australians have been rather more vocal about the effect of foreign banks withdrawing from the local scene, probably because there were more of them operating there with a physical presence than there are/have been in NZ.Actually most of the banks operating in NZ are foreign - Kiwi Bank and TSB are really the only two exceptions.

[Lego_Man]

Government should float 25% of Kiwibank.

Fonterra should do the same.

[Dr_Who]

Government should float 25% of Kiwibank.

Fonterra should do the same.

I agree, would love to participate in the float and get some shares.

[Lego_Man]

Me too, it's a very slim possibility in a 2nd Nat term perhaps?

Of course the anti asset sales brigade would be up in arms..and rightly so given that most of it would eventually end up with foreign instos. Although the advent of Kiwisaver might mitigate this.

[Dr_Who]

Me too, it's a very slim possibility in a 2nd Nat term perhaps?

Of course the anti asset sales brigade would be up in arms..and rightly so given that most of it would eventually end up with foreign instos. Although the advent of Kiwisaver might mitigate this.

If the govt have a controlling interest, it would limit the chance of foreign control, esp if the NZ public objects to it. It is pretty poor show that the NZ market does not even have one banking stock.

[macduffy]

Actually most of the banks operating in NZ are foreign - Kiwi Bank and TSB are really the only two exceptions.

That's true, but the point is that none of the Aussie banks have plans to withdraw from NZ, as far as we know, although they may well be cutting back on lending as they find funding harder to obtain.
A fair chunk of lending to the big corporates in Aust has been from foreign banks, many of which had physical representation in that country. This is contracting as those banks are increasingly restricting their loans to concentrate on their home markets. Hence the spate of equity raisings by Aust companies.
The same effect is being felt in NZ but to a much lesser degree, partly because of our lower level of corporate activity which meant that foreign ( non-Aust) banks had not developed the same level of penetration into our market.

[Lego_Man]

If the govt have a controlling interest, it would limit the chance of foreign control, esp if the NZ public objects to it. It is pretty poor show that the NZ market does not even have one banking stock.

I was thinking more if they floated 30%, and say 20%+ ended up offshore.

I think any offering would be snapped up (not right now obviously though) and would be a good money-spinner for the government.

[macduffy]

Government should float 25% of Kiwibank.

Fonterra should do the same.

We're getting well off the FBU track here but:

I'd be interested in Kiwibank but probably not in Fonterra. I can't see dairy farmers ever agreeing to a corporate structure that didn't give them control, eg the payment to farmers for their milk which is and would remain a critical determinant of Fonterra's profitability.

[LJB]

FBU dividend reinvestment plan suspended for this dividend. Unfortunate given recent retracement in share price. No apparent (clear) announcement prior to receiving dividend summary in the mail. I thought there would have been, purely in the interests of keeping the market informed.

[777]

FBU dividend reinvestment plan suspended for this dividend. Unfortunate given recent retracement in share price. No apparent (clear) announcement prior to receiving dividend summary in the mail. I thought there would have been, purely in the interests of keeping the market informed.


This would indicate that it was not suspended. Maybe there is another reason you got a cash one.

FBU
26/03/2009
DRP

REL: 1608 HRS Fletcher Building Limited

DRP: FBU: Dividend Reinvestment Plan Price Determined

Auckland, 26 March 2009 - The discounted share price used to calculate
entitlements under the Fletcher Building Limited Dividend Reinvestment Plan
has been set at NZ$5.9370.

This has been determined as 97 percent of the volume weighted average price
of the price-setting trades of Fletcher Building shares sold on the NZSX in
the five business days immediately following the dividend record date of 18
March 2009 in terms of the Dividend Reinvestment Plan Offer Document.

Shareholders who have elected to participate in the Dividend Reinvestment
Plan reinvest their dividends to receive additional shares, rather than cash.
The new shares will be allocated on the dividend date, 8 April 2009. The
number of Fletcher Building shares to which participants are entitled is the
total of the net dividend remittance per share which would otherwise have
been payable to participants, divided by 5.9370.

For all NZ resident shareholders who do not hold an exemption certificate,
resident withholding tax (RWT) is required to be deducted at 33 percent from
that part of the gross dividend which has not been credited with imputation
credits and at 3% from that part of the gross dividend which has been
credited with imputation credits at 30%. Accordingly, for those
shareholders, a deduction of 3.9 cents per share has been made from the
dividend of 24.0 cents per share and forwarded to Inland Revenue. Resident
shareholders who have a tax rate less than 33 percent will need to file a tax
return to obtain a refund of the RWT.

For non-residents, the net dividend remittance per share includes a
supplementary dividend which partly offsets the New Zealand non-resident
withholding tax on the dividend.

For this dividend, no franking credits are available for Australian resident
shareholders. The dividend remittance is subject to the 15% New Zealand
non-resident withholding tax but is partly offset by the payment of the
supplementary dividend of the same amount. An illustration of the
calculation of the net dividend remittance is available on the Company's
website (www.fletcherbuilding.co.nz).

Philip King
General Manager Investor and Media Relations
Ph: +64 9 525 9043
Mob: +64 9 27 444 0203
End CA:00177888 For:FBU Type:DRP Time:2009-03-26:16:08:44

[Snow Leopard]

From the capital raising announcement (http://stocknessmonster.com/news-item?S=FBU&E=NZSE&N=178133) of 1st April 2009



10. Dividend Reinvestment Plan

As a result of the announcement of these capital structure initiatives and
the trading update, it has been determined that it would be inappropriate to
proceed with the allotment of shares under the Company's Dividend
Reinvestment Plan in respect of the 2009 interim dividend, which is payable
on 8 April 2009. Accordingly, all participants in that Plan will be paid a
cash dividend, and eligible shareholders will be able to invest the proceeds
in additional shares of the Company under the SPP.

The Dividend Reinvestment Plan will remain operative for future dividends.


regards
Paper Tiger

[LJB]

"Get with the program guys !"
Quite right.
Thanks for that. I better replace my Warehouse spectacles.

[macduffy]

Just a favour to ask...I'm going travelling for a couple of weeks, and then back in Australia on 18 April. My mail get's sent to an address in NZ. Could someone please tell me when the SPP details arrives in the mail in NZ?

Thanks!

Liss

SPP application form in today's mail.

Cheers

[macduffy]

SPP application form in today's mail.

Cheers

And the SP is up 12c to $6-62! versus SPP at $5-35.

Thank you, Mr FBU!

;)

[KJ]

I thought that the SP would have been weaker as maybe folk would be selling at current levels to buy back in at $5.35.
I could be missing something and probably am-anyone help me here?

[macduffy]

Just a strong market at present with more buyers than sellers.
Maybe a bit of realisation that FBU had been smart in raising equity before they needed it, putting them in a strong position if a "must buy" acquisition happens to appear.

;)

[KJ]

Thanks Macduffy-would you agree that it makes sense to sell now and buy back at 535?

[macduffy]

That depends on your circumstances and reasons for holding FBU.
The maximum SPP amount is NZD11,500 which at $5-35 will get 2149 shares, or 2150 if they round it up to the nearest or next whole number.
If one didn't want to add to one's FBU holding then selling 2150 shares at today's SP and taking up the SPP would yield a nice profit.
On the other hand, buying 2150 at a good discount to market and adding to one's holding might be a good idea too for those who can afford it. But only if you think that FBU is a good investment at the price. I'm in that category.

;)

[KJ]

Thanks Macduffy-yes-I do not want to add to my fbu holding so have been selling some today.I guess that the downside is that you do not know how many you are going to be allocated.I will apply for the max & hope for the best.

[macduffy]

Yes, there is a risk that the issue will be oversubscribed and that there will be some scaleback. The bigger the difference between $5-35 and the SP, the greater the likelihood of that occurring although there are always holders who don't take up issues for various reasons, however attractive the offer!

Incidentally, I see that roundings will be to the nearest share, expressed rather ambiguously as " rounded up to the nearest share."

;)

[glennj]

I haven't received the SPP & eligible shareholder topup info yet. Can some one tell me when money needs to forwarded by. (need to do some cashflow planning)
Am a bit peeved that there wasn't a rights issue as the eligible shareholders may not be able to top up if the SPP is fully subscribed.
Quote from FBU website follows:
there may be ... "a Top-Up Offer to a small number of eligible shareholders whose holding would otherwise be diluted by the Placement. The Top-Up Offer will be a maximum of NZ$20 million and will only be available if the SPP is not fully subscribed to the amount of NZ$100 million."

[waikare]

[QUOTE=glennj;251410]I haven't received the SPP & eligible shareholder topup info yet. Can some one tell me when money needs to forwarded by. (need to do some cashflow planning)
Am a bit peeved that there wasn't a rights issue as the eligible shareholders may not be able to top up if the SPP is fully subscribed.
Needs to be in the hands of the Computershare Investor Service P Bag 92119 Auckland no latter than 5 pm on the 5th May

[Lawso]

What price for the shares are you guys picking, once the SPP is over? Surely a drop below current levels after such a huge dilution?

[glennj]

Ta for that info Waikare. Received the SPP offer document late this morning when I cleared my P O box.

[LJB]

Do any of you whizzes on calculators know how many shares one would receive per 10 or 100 or 1000 currently owned should the SPP offer be fully subscribed and a pro rata scaleback results? It would be useful to know the minimum number of shares we are eligible for in this highly likely scenario. I, for one would like to know (realistically) how much cash I need to scratch around for.

[winner69]

Do any of you whizzes on calculators know how many shares one would receive per 10 or 100 or 1000 currently owned should the SPP offer be fully subscribed and a pro rata scaleback results? It would be useful to know the minimum number of shares we are eligible for in this highly likely scenario. I, for one would like to know (realistically) how much cash I need to scratch around for.

You have to send in the cash for the amount you apply for so isn't that the amount you need to 'scratch around' for

If over subscribed you get a refund for the amount they scale you back by .... but you have to front up with the cash first

You don't need to send anything .... if you do then minimum is $1,000

Limiited to $100m so only 19 million odd new shares to be issued. There are about 32,000 shareholders so if all take up the offer they'll want 69 million odd shares between them it looks likely that there be a pretty significant scaleback ... esp as there is well over a $1 in it eh

Whether it is truely prorate or whether they have the discretion to say give everybody at least a $1,000 worth I don't know

Could be interesting

'Scratch together' as much as you can and take your chamce mate

[lissica]

SPP application form in today's mail.

Cheers

Thanks macduffy ^_^

Has everyone received it now? Direct Debit? I'm on the NZ register so BPAY probably isn't an option.

Also, is there any way of paying besides cheque? I just got back to Australia after being on holiday.

Cheers,

Lissica

[peat]

http://www.sharetrader.co.nz/showpost.php?p=252486&postcount=242

it would pay to read this post in conjunction with the previous one in the thread as it refers to the strategy of this method.

[Snow Leopard]

As at 4 May 2009, the amount of oversubscriptions received was 44%. (http://stocknessmonster.com/news-item?S=FBU&E=NZSE&N=179414)

Far to many people jumping on the "money for old rope" band-wagon.
After buying a few to get on the program I applied for the maximum permitted and am disappointed to be scaled back so much.
I wonder when they will refund the excess?

Still it is better than a poke in the eye with a sharp stick.

regards

[QOH]

Yes that sucks I'd already entered them in my portfolio. It made it look healthier today.

[LJB]

I don't think there was ever any doubt that that the issue was going to be oversubscribed, so not surprised at all. What will happen to the underscribed top up offer shares. Will they be allocated on a prorata basis to the SPP subscribers as a top up?

[Shooter]

I thought the SPP $100mil allocation was extended to $120mil?

[lissica]

As per todays announcement. After Scaleback:

NZ$6,505 (NZ shareholders)
AU$5,091 (Australian shareholders)

[Snow Leopard]

I thought the SPP $100mil allocation was extended to $120mil?
No. The $80m 'small-fry SPP' was extended to $100m and the $20m 'those left out TUO*' wasn't.

You have about $177m fighting over the $100m so we each get 100/177 = 56.5% of what we asked for.
The $20m crew get scaled back to 20/21.7 or 92.2% of their requests.

regards
Paper Tiger

*TOU = Top Up Offer

E&OE, I may be wrong. I was once many years ago when I was young

[The Doctor]

keep pumping money into this puppy.Just look at the management...bought Formica..what a steal...sp will recover in 5/6 years no doubt.

[winner69]

Citigroup have a pretty dismal outlook for FBU for the next few years

[winner69]

Those Citi guys reckon $129 NPAT this year with little prospects of a recovery much before 2012

With FBU earnings now having to be apread over 600 million shares instead of 500 million a year ago if Citi are right this would give them an eps of just 21 cents ..... so FBU currently at 684 outs them on a PE of about 32 ..... for a stock that traditioanally trades on a multiple of 10-12

Just as well all the worlds problems have been solved and all is honky dory again so all the spare cash has to find a home ...... which means Citi report is a load of crap and FBU is still way undervalued

[Lego_Man]

I'm flogging mine off as soon as i can, which IMO should coincide nicely with the end of this market rally...

[QOH]

Are anyones new shares showing as registered at computershare, or had their excess payment returned yet?

[Lego_Man]

Nope, just checked online...nothing there.

I had 20th May in my head as a date?

[Lawso]

Computershare tell me the allotment will be done on May 21, with statement and refund to follow soon after

[peat]

The waterview tunnel canning might mean more work for Fletcher's?
(They dont have tunnel building experience)

[AMR]

Fletchers won't do it alone, they will probably partner up with the likes of MacDow.

[boxing_beaver]

bang on, Fletcher wouldnt wanna be the main contractor for another tunnel, not after Manapouri

[The BOWMAN]

I like FBU. The reason being in the medium to long term, there is only one direction for its share price - up. However, it does surprise me that it actually drops amid good news about housing in US today. Anyone can figure out some sensible explaination? Profit taking doesn't count. It is never a sensible explaination.

[dumbass]

I like FBU. The reason being in the medium to long term, there is only one direction for its share price - up. However, it does surprise me that it actually drops amid good news about housing in US today. Anyone can figure out some sensible explaination? Profit taking doesn't count. It is never a sensible explaination.

today housing starts were reported at the lowest level since 1959

[Lego_Man]

Would not be surprised to see a >10% drop in FBU stock tomorrow as people profit-take their entitlement shares. Especially if there's a bad day in markets overnight.

[The BOWMAN]

Would not be surprised to see a >10% drop in FBU stock tomorrow as people profit-take their entitlement shares. Especially if there's a bad day in markets overnight.

I hope they do drop > 10% so I can buy more.

[Lego_Man]

Computershare online has nothing as yet...

[Lawso]

I'm picking that those who applied for the full $11,500 worth will be scaled back to around $7k worth.
But how about this? According to figures published in the Herald on Monday, Hugh Fletcher has bought $761,706 worth, R. Waters $745,485 and chairman Deane $34,170 worth - all at 535cps!!! One rule for the directors and another for the mugs, eh?

[macduffy]

Yes, most of these SPP offerings are accompanied by "institutional placements" to institutions and "sophisticated" investors.
I guess directors fall into the latter category!

:rolleyes:

[Lawso]

From nzx.com/markets I learn that:
* those who applied for the permitted maximum of NZ$11,500 worth of new shares were yesterday allotted 1216 shares @ $5.35 = NZ$6505.60.
* refunds of $4994.40 will be credited to applicants' bank accounts, and/or refund cheques are to be sent out, today.

[Casa del Energia]

Yes, most of these SPP offerings are accompanied by "institutional placements" to institutions and "sophisticated" investors.
I guess directors fall into the latter category!

:rolleyes:


Since I'm not an institution, that must mean I'm an 'unsophisticated' investor then, as it is the usual story - I'm standing outside the restaurant with my nose pressed against the window waiting for a few crumbs tossed from the table.
Meanwhile my original holding takes a total thrashing on the market today and yesterday.

Remind me to doff my cap when passing a restaurant with the 'sophisticates' feeding at the trough.

[lissica]

Since I'm not an institution, that must mean I'm an 'unsophisticated' investor then, as it is the usual story - I'm standing outside the restaurant with my nose pressed against the window waiting for a few crumbs tossed from the table.
Meanwhile my original holding takes a total thrashing on the market today and yesterday.

Remind me to doff my cap when passing a restaurant with the 'sophisticates' feeding at the trough.

No, I think it was based on how many shares you owned. I don't have the announcement in front of me, but from memory it was something like 13,000 shares or therabouts.

I should have paid up in full for my FBUIZA warrants before they expired, would have made it as a sophisticated invester ^_^

[Wilkins_Micawber]

No, I think it was based on how many shares you owned. I don't have the announcement in front of me, but from memory it was something like 13,000 shares or therabouts.

I should have paid up in full for my FBUIZA warrants before they expired, would have made it as a sophisticated invester ^_^

To be eligible for the "top-up offer" one had to be either ...

(a) "an experienced investor" - this could be certified by an "independant financial services provider", which may actually mean that you are in reality not experienced, or why would you be paying someone else to invest for you, or

(b) a "wealthy investor", which means to have $2 million worth of net assets, or $200K annual income for each of the last 2 years (this could be certified by an accountant).

Eligibilty allowed one to apply for up to a further 18% of your total existing FBU shareholding, less the 2,150 which every shareholder was already entitled to apply for.

"Top-up" applications certainy fared best! "Normal" applications received approx 56% of that applied for (1216 out of 2,150), whereas top-up applications received about 93% - certainly worth the effort og getting certified.

[Phaedrus]

FBU's "medium-term" (16 week) uptrend is indeed running out of steam. See how it has stopped making higher highs and its higher lows are making sequentially smaller gains. The uptrend is still intact, but it is decelerating. The OBV uptrend is also still intact, with a confirmed trendline in place. Many current holders of this stock will be watching very closely for Sell signals about now. These could include a break of the OBV trendline or a break below the recent support at $6.47.

YK, I see that you included an RSI plot on the chart you posted. Did you notice the series of Bearish divergences it has been giving? This alone should be reason enough not to consider buying FBU at this stage.

Right now, FBU is a Hold - not a Buy.

Is FBU entering into a trading range? Maybe - only time will tell.

http://h1.ripway.com/78963/FBU624.gif

[peat]

ABN Amro report this morning :

Fletcher Building - Momentum building - We expect a further decline in earnings in FY10, but leading indicators suggest a recovery is increasingly likely in key residential construction markets. Macro-related news flow is thus likely to be incrementally positive. On the basis of our conservative estimates, FBU offers fundamental valuation appeal. BUY.


I'm still long from my butterfly trade posted earlier around 6.25 but truth be told that has played out when it offered $1 per share in the first week - which I failed to capitalise on - and so now I'm kind of caught into holding for medium term.
Dont really disagree with Phaedrus analysis but can afford to hold through the wobbles and do play the other side (down) on the S+P to compensate

[Lego_Man]

Yep, nothing wrong with a good old trading range - i'd like to main some coin off the trade but am comfortable holding at these levels.

[peat]

A unit of Fletcher Building (FBU.NZ) is part of a consortium that has received a NZ$406 million tender for a major road tunnel project in Auckland, Transport Minister Stephen Joyce said Monday.
The Victoria Park tunnel project has been won by the unit Fletcher Construction, Beca Engineering, Higgins Contractors and Australian consultancy Parsons and Brinckerhoff.
Construction is due to begin in November with the widening of the existing highway and Joyce said it may be completed in mid-2011 in time for the Rugby World Cup.
An earlier start is part of a government decision to boost highway construction spending by almost NZ$1 billion over three years to try to lift the country from a recession that began at the start of last year.
This project is expected to start with an onsite workforce of about 120, before rising to 300 at the peak of the four-year project, Joyce said.
Fletcher shares were up 0.5% at midday Monday at NZ$6.59 on a largely flat market.

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10589422&pnum=0

Will be interesting indeed ... FBU could be punished quite badly or it could all be factored in ... We'll know soon.

Its all factored in Belg

FBU have been forgiven for the past indisgressions .... might have been cash a few years ago but when you write things off its non cash ... and providing for restructure costs is all good news because heaps more money will be made in the future eh .... shareprice probably go up

[winner69]

Like this bit from that article Belg posted -- [I]Credit Suisse's Yeo is predicting $304 million net after-tax profit next year and back to the glory days with $427 million in 2011[/B]

Springsteen would be gutted .... the glory days aren't as glorious as they used to be ... Yeo says glory days with $427m profit in 2011 .... heck they made $484m in 2007 and $467m in 2008 ..... whats the guy on

One interesting thing is that when they made $484m in 2007 it was $1 a share .... but with all the new capital etc returning to the real glory days of $500m profit would only be 82 cents

On Yeos glory days of $427 only equates to 70 cents a share .... in 2 years time as well .... over many years when FBU was a star it only traded between 10 to 12 times earnings .... so todays price is just over 10 times 2011 forecast earnings ........ doesn't suggest much upside over the next 2 years does it .... unless Yeo is really conservative on his outlook

I am certain that the dilution factor of the extra shares has not really been put into peoples calculations yet

Never mind the fundamentals ... just follow the sentiment ... and at the moment its postive

[The Doctor]

have faith in the directors who blew so much on Formica...?hopeless.

[Lawso]

The Formica fiasco is just another Deane disaster. Remember Telecom's purchase of AAPT, which Deane shoved through against the judgment on one or two other directors and management.

[forest]

Interested in FBU, then this should be of interest to you. Everybody is wellcome. From NZSA.
Please mark your diaries to come along to the meeting and we would encourage you to bring a friend(s) who would be interested in Jonathan’s talk on the forward looking strategy for one of New Zealand ’s most prominent companies, and those interested in the work that we do at the Association


Other NZSA branch support and attendance is most welcome



New Zealand Shareholders’ Association Inc

Auckland Branch




BRANCH MEETING
Wednesday 26 August 2009


7.30 pm




(Tea, coffee and biscuits from 7.00pm – presentation commencing 7.30 pm)



Hobson Room, Level 4

Alexandra Park Functions Centre, Greenlane.

Guest Speaker



Jonathan Ling – Chief Executive Officer

Fletcher Building Limited







Attendance contribution: $5 per person

[winner69]

It has mine and my worry is that underlying operating profit will dissappoint - and the outlook assessment is relayed as being pretty grim; and there'll be a selloff as, as you've noted, things could go flat for 2+ years. As regards sentiment, I totally agree. The fundimentals are quite clear but making more out of FBU (unless the economies in which FBU operate supprise!) is going to be very much a TA exercise.

discl: hold ... but maybe not for much longer.

No sell off Belg ... all good on the western front

[macduffy]

No sell off Belg ... all good on the western front

Yes, a pleasant surprise!

I was expecting the market to jump at the chance to sell down FBU. May do so yet, of course.

Disc: Holding.

[winner69]

Note FBU report eps at 59.7 cents per share ... down from reported 93.2 last year

That calculation is on a time weighted average basis

If you take the number of shares actually on issue (after all the new ones) eps is 51.9 cents per share

So most will say on a PE of 12 at the moment .... but in reality on a PE of 14

So even with no guidance from Ling I see an awful lot of optimism built into the share price at 720

But what the heck and what do i know anyway .... the shareprice is on fire and already up to 733 ... and heading for 800 next week

[Wilkins_Micawber]

Note FBU report eps at 59.7 cents per share ... down from reported 93.2 last year

That calculation is on a time weighted average basis

If you take the number of shares actually on issue (after all the new ones) eps is 51.9 cents per share

So most will say on a PE of 12 at the moment .... but in reality on a PE of 14

So even with no guidance from Ling I see an awful lot of optimism built into the share price at 720

But what the heck and what do i know anyway .... the shareprice is on fire and already up to 733 ... and heading for 800 next week

Share markets are forward looking - if PE is 14 for a last year (a bad year), with the housing market now showing signs of turning, infrastructure spending by government, and restructuring/cost cutting having been undertaken, then it doesn't seem unreasonable to expect better results going forward...

[winner69]

Agree with you on the forward looking nature of the market but just pointing out how different maths can chamnge things

Forward looking ... CS analyst Yeo says $$427 in 2011 ... 70 cents a share in 2 years ... so with approaching 800 a forward looking PE of 11 plus ... and FBU over many years has usually only had a PE in the 10 - 12 range

But as i told belg .... what the heck what do I know anyway ...and as belg says the fundies lead the way and the others follow .... theory has it a few major shareholders decide the fate of a company's shareprice anyway .... and at the moment those few are happy chappies

[Phaedrus]

http://h1.ripway.com/78963/FBU812.gif

[Kryptor]

What a shocking result.

The presentations make me sick.

Do management expect us to somehow believe that if expenditure is abnormal this means we can somehow ignore it. Writedowns of formica are real. The money they spent on acquiring Formica was real. The money spent on downsizing production is real.

Disgusted with distruction of shareholder value.

And incredulous with the markets response.

[macduffy]

What a shocking result.

The presentations make me sick.

Do management expect us to somehow believe that if expenditure is abnormal this means we can somehow ignore it. Writedowns of formica are real. The money they spent on acquiring Formica was real. The money spent on downsizing production is real.

Disgusted with distruction of shareholder value.

And incredulous with the markets response.

All very true, but the writedowns were well signalled and built into the price.

Must admit though that I'm a little surprised by the strength today but as a shareholder I'm not complaining about that! The market looks ahead and clearly expects better times.

[winner69]

Two years ago FBU were cock a hoop --

Fletcher Building announces that it has successfully completed the equity placement component of the funding package for its acquisition of Formica Corporation. The Chief Executive Officer, Mr Jonathan Ling, said that the placement had been very successful, with 26,000,000 shares being placed at a price of NZ$12.60 per share, realising NZ$327.6 million in total. The shares are expected to be issued on settlement on Friday 31 May 2007.

"This is a further vote of confidence in Fletcher Building, and the strategy that has led to acquisitions such as Formica", Mr Ling said. "The placement has been well supported across a broad range of institutional investors, particularly those that already held shares in Fletcher Building."

The writeoffs re Formica were less than $200m so those institutional investors didn't waste all there dosh

Poor instos ... but holy ****e probably some of my suoer went to that investment

Kryptor -- an unmitigared disaster .... and yes it was REAL money once .... that unfortunately ended up in the hands of private equity who had bailed out Laminex not long before .... but get over it because thats all in the past and its all bright and rosy on the horizon

Its a fact of life that over time more than 20% of corporate profits end up as an ununusal / abnormal item at a future

[winner69]

Everybody who knows are touting a W shaped recovery

A worry for FBU shareholders is that the chart onlly reflects a V .... is there another V to come .... to make a W