Wonder if Ralph choked up like Bill did when he wrote this -
Fletcher Building remains a great and solid business. I have every confidence it will weather this storm, and once again deliver our shareholders the value they expect and deserve.
there revenue in construction is over 2 billion , there stopping all bidding for further work on vertical construction , significant hit to revenue going forward i reckon , hence earnings will be less going forward and potentially lower divs , even at 6 i reckon your paying nearly 20x earnings for future yrs
Disclosure imo not adequate. Blaming sub trades is laughable. Must be a lot of gibbers plumbers and sparkies holidaying in St Moritz and on their superyachts. Reality is they gave fixed price contracts on stuff that wasnt designed. Also any bunny knows digging underground is fraught with danger. Board signed off on a totally crazy strategy. 540 staff on over 500g a year. Take the knife to board and staff and bs costs.
common industry practice is to ‘go in cheap’ off the plans at say a 1-2% margin, then hope like d*ck that the Client changes their mind as they progress through the build and ping them 20-30% on any of the variations to make-up lost margin <---------> until the industry changes the way it operates, there is always going to be that added risk to the builder
"While the B+I market sector remains characterised by high contract risk and low margins we will no longer participate. If these market dynamics change in the future we would reconsider our position." - well, at least they've agreed with me and have finally seen the light........ hopefully as an industry 'leader' (and I use that term lightly) they can perhaps help force some positive change.
PS the banks havent waived. They have stayed requiring new terms. If i was the notes guys i would totally screw them on the negotiations. Also my bet is the banks will require an amort of debt going forward. A bitter pill for shareholders
Originally Posted by winner69
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