They are building things no-one wants
https://www.stuff.co.nz/life-style/h...nner-city-push
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They are building things no-one wants
https://www.stuff.co.nz/life-style/h...nner-city-push
I hope that was my Kiwi Saver selling down today - seeing them holding the likes of FBU was what persuaded me I better take my retirement into my own hands!
Calm yourselves. Shane Jones is going to set up a new infrastructure unit in the Government.
Will he call it the Ministry of Works?
Boop boop de do
Marilyn
https://www.interest.co.nz/news/9538...2%80%99s-major
From what I understand, commercial construction contracts are written in a way that if they aren't built by a certain date then the builder has to compensate the owner. This is usually done either a % of the total contracted amount paid in intervals, or the value of lost revenues x interest rate. Given how many tenants are in Commercial Bay, and how much money Precinct loses having the building delayed by another 6 months, this is likely to be a pretty penny they will have to pay back. Interesting, that there was no update on this despite articles out on a 6 month delay everywhere. Also no update on the convention centre either.
When the bidding goes up for these contracts (usually done by tender), the companies bidding are often modelling their data on the best case scenario and even at this level its likely their margins are going to be tiny, and their margin of error very high. However at companies such as FBU they are short term thinkers who are likely to get bonuses on winning contracts and getting deals done hence they enter into poor contracts.
I'm not that pleased reading their results either, all this crap about "earnings excluding B+I is so much higher", of course it is but that's a core part of your business so you have to own it. I'd like to see more focus on the home building front, as its much harder to screw up going forward, the country needs more houses and the govt needs somebody to build them.
Disc: Not a holder
https://www.nzherald.co.nz/business/...008&ref=NZH_fb
So I get that the homes pop up overnight on site, but...
Is it just me or does there seem to be a fair amount of double handling, a large an expensive crane onsite, and not to mention the 50 builders ... so are we really that much ahead of the old way?
I guess the most frightening sentence in this article was this one:
A bit thick to see this coming from the company which gave us numerous delayed mega projects (in Auckland and Christchurch), which planned at least one big projects without even considering essential components (like electrical connections), which is responsible (even if they work hard to weasel out) for atrocious repair quality in the Christchurch rebuild, which left humidity sensitive building components for months uncovered in the open to rot (Christchurch Airport Hotel) and which worked big infrastructure projects with sub-standard steel.Quote:
"The aim of these trials is to help meet the high demand for new homes by speeding up the house building process while maintaining quality and ensuring regulatory compliance.
What exactly do they mean with "maintaining quality"?
https://www.nzx.com/announcements/324803
Interesting move by FBU - $300m takeover offer of STU.
Guess the company is starting to think beyond asset sales and restructuring to growth again?
Next move is FBU and I believe FBU will increase its offer to $2.00
First offer is never last offer so $2 offer is on imo.
The way to assess this is that FBU can debt fund itself at less than 5% pa so even if FBU pays $2 per share ($330m), a takeover of STU will be earnings positive : $25m EBIT less $15m interest = $10m additional EBIT for FBU
$330m @ 4.5% pa = $15m interest or at 5% = 16.5m
Plus all the benefits from the lovely synergies and rationalization to come!