FBU - Fletcher Building

[winner69]

Tracking the buyback but couldn't but notice that when FBU did a profit upgrade and announced the buy back back in May the share price was $7.22

Much the same as today ....hmmm

[Greekwatchdog]

Peaked at $7.99 2 months ago from memory then came Covid and higher interest rates ticking up. Building costs going up left right and center thou those costs are being passed on. Looking forward to update on Tuesday 19 Oct.

[JohnnyTheHorse]

Buyback kicking in again around the $7 level suggests this will be a likely floor. Good buying around these levels in my opinion.

Disc: long term and swing position.

[sb9]

Peaked at $7.99 2 months ago from memory then came Covid and higher interest rates ticking up. Building costs going up left right and center thou those costs are being passed on. Looking forward to update on Tuesday 19 Oct.

Agreed, second lockdown in Aug put a "spanner in the works" to use building terminology. But for that we could've been looking at 8 handle by now.

[peat]

Trading either side of the New Zealand lockdowns has been very solid, and at levels above the prior
year.

[peat]

It's facing this 7.30 resistance again
FBU1019.JPG
Its beginning to look like 6.90 was a significant low with 7 now being major support.

Maybe it can break through the green dotted line this time and R can become S.

[Greekwatchdog]

For Bar latest update this morning. Target $8.20
OUTPERFORM


Fletcher Building (FBU) has provided a trading update and outlook commentary at its annual shareholder meeting (ASM).
While no quantitative FY22 guidance was provided, commentary highlighted, 1) a strong rebound out of Level 4 restrictions
with NZ volumes ahead of last year despite ongoing Level 3 restrictions in Auckland, and 2) only a slightly negative overall
impact from lockdowns in Australia. We have made minor adjustments to our forecasts with a longer than expected period
of elevated restrictions in NZ offset by a stronger than expected rebound in activity, particularly in Auckland which remains
at Level 3. Given the robust outlook we continue to see value at current levels. OUTPERFORM.
What's changed?


Lockdowns just a blip
Whilst 1Q22 has been impacted by restrictions across both side of the Tasman, FBU has seen a strong bounce back in activity to levels
higher than the prior year as restrictions have eased in NZ. While there is clearly some catch-up work post lockdown the industry is
operating at a higher than expected level, particularly given Auckland remains in Level 3. As such FBU expects volumes for the balance
of the year to be above last year assuming no adverse changes to alert levels. In Australia, the net impact of lockdowns has slightly
subdued trading and FBU expects activity to lift as restrictions are eased in Victoria and New South Wales. While 1H22 group EBIT
margin will clearly be lockdown impacted, FBU expects 2H22 will show progress towards its FY23 target of 10%.
First half impact but solid growth going forward
We are forecasting 1H22 EBIT of NZ$304m down -6% on the prior year. We expect an impact across all divisions but slightly larger
declines in building products reflecting shutdown and restart costs of major manufacturing plants. We expect a stronger 2H22 with
EBIT +10% on the prior year. FBU also highlighted that it has been able to effectively manage rising input costs and supply chain
disruptions in FY22 thus far, suggesting price increases are sticking and the margin headwind seen in recent periods is abating.
Remains attractive


We continue to view FBU as attractive at current levels for a number of reasons; (1) FBU is trading on undemanding multiples (12m
fwd EV/EBIT of 11.2x and 12m fwd PE of 13.6x), (2) the outlook for construction activity remains strong, and (3) FBU's balance sheet
is in good shape. The recent resumption of FBU’s NZ$300m buyback (c.NZ$275m to complete) highlights management’s confidence
in the outlook, in our view

[peat]

Maybe it can break through the green dotted line this time and R can become S.

You know you can you know you can

[peat]

not today it seems - poked head above but then we got the Aussie smackdown.

FBU1020.JPG

[FrankF]

It appears still a long way to get to $8.20 (For Barr's target)...

For Bar latest update this morning. Target $8.20
OUTPERFORM


Fletcher Building (FBU) has provided a trading update and outlook commentary at its annual shareholder meeting (ASM).
While no quantitative FY22 guidance was provided, commentary highlighted, 1) a strong rebound out of Level 4 restrictions
with NZ volumes ahead of last year despite ongoing Level 3 restrictions in Auckland, and 2) only a slightly negative overall
impact from lockdowns in Australia. We have made minor adjustments to our forecasts with a longer than expected period
of elevated restrictions in NZ offset by a stronger than expected rebound in activity, particularly in Auckland which remains
at Level 3. Given the robust outlook we continue to see value at current levels. OUTPERFORM.
What's changed?


Lockdowns just a blip
Whilst 1Q22 has been impacted by restrictions across both side of the Tasman, FBU has seen a strong bounce back in activity to levels
higher than the prior year as restrictions have eased in NZ. While there is clearly some catch-up work post lockdown the industry is
operating at a higher than expected level, particularly given Auckland remains in Level 3. As such FBU expects volumes for the balance
of the year to be above last year assuming no adverse changes to alert levels. In Australia, the net impact of lockdowns has slightly
subdued trading and FBU expects activity to lift as restrictions are eased in Victoria and New South Wales. While 1H22 group EBIT
margin will clearly be lockdown impacted, FBU expects 2H22 will show progress towards its FY23 target of 10%.
First half impact but solid growth going forward
We are forecasting 1H22 EBIT of NZ$304m down -6% on the prior year. We expect an impact across all divisions but slightly larger
declines in building products reflecting shutdown and restart costs of major manufacturing plants. We expect a stronger 2H22 with
EBIT +10% on the prior year. FBU also highlighted that it has been able to effectively manage rising input costs and supply chain
disruptions in FY22 thus far, suggesting price increases are sticking and the margin headwind seen in recent periods is abating.
Remains attractive


We continue to view FBU as attractive at current levels for a number of reasons; (1) FBU is trading on undemanding multiples (12m
fwd EV/EBIT of 11.2x and 12m fwd PE of 13.6x), (2) the outlook for construction activity remains strong, and (3) FBU's balance sheet
is in good shape. The recent resumption of FBU’s NZ$300m buyback (c.NZ$275m to complete) highlights management’s confidence
in the outlook, in our view