Higher than NZX actually :t_up:
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This is holding up remarkably well at $6.90.
"Fletcher Building announces further provisions for expected losses in its Buildings + Interiors business of $486 million, leading to a total projected B+I EBIT loss of $660 million in FY18"
"Expected FY18 EBIT for the Fletcher Building Group excluding B+I remains $680 million to $720 million "
They really like mentioning what their EBIT is without B+I losses.
If we include B+I losses to group EBIT, would that imply it would be $20 million to $60 million?
My guess is Fletcher building profits excluding B&I are a sham and not sustainable.
I'm guessing B&I have losses as they are forced to buy materials internally at overinflated prices to market. This makes B&I loss making and the rest of Fletcher Building profitable. Without B&I what prices will Fletcher Building materials get? will there be new material entrants?
I still think the price is high for now and a price around $5.60-$5.90 is something I would be semi comfortable with the news given. Who knows in 6 months maybe lower maybe higher. But I don’t see it rising in a hurry
One thing occupying Mr Market
FBU value so far today: $87,487,212
Total NZX value today so far: $135,820,254
i must say I start to look a bit sideways at their debt issues now. FBI170 5 year notes being rolled over at coupon of 5% - with 5 year swap rate at 2.7% , that is a reasonable corporate premium , much more than some recent ones that were lower than Term Deposits.
But is it enough to compensate for that increased uncertainty - the feeling that surely must lurk now in all prudent investors - is this the beginning of some slope into worse and worse troubles and eventually the unthinkable.
Other notes are now at yield premium to issue (meaning a capital loss for holders)
I dont think I'd be game to lend to them for 5 years now - even with liquidity allowing an early sale.