FBU - Fletcher Building

[Panda-NZ-]

Ross Taylor (ceo) has construction experience rather than being a finance guy which is good.

[Greekwatchdog]

Hmm another fire at Convention Centre. Thankfully this time not too much damage.https://www.stuff.co.nz/auckland/300...vention-centre

[winner69]

Jarden reckon Fletchers doing well and increased FY forecast

I liked this bit …a long earnings upgrade cycle is likely

Current target price $7.36

[winner69]

NZ housing consent records broken, nearing 50,000 mark - Stats NZ

https://www.nzherald.co.nz/business/...2N43M6W4KVKXA/

[Habits]

NZ housing consent records broken, nearing 50,000 mark - Stats NZ

https://www.nzherald.co.nz/business/...2N43M6W4KVKXA/

That is huge. I wonder how 50,000 apartments compares value-wise to a lower number say 20,000 standalone mcmansions. As an aside, house prices are out of whack with replacement cost. Some old 70s flats on single title with block and asbestos cladding which we used to own, were on the market recently. The asking price (with a 5 percent yield) after deducting improvements, worked out to $6000 per sqm of land value. Located in Hamilton. Am not sure even Kpg sold their 3 hectare sylvia park block anywhere near that much. If buyers want to pay it, it is their choice.

[winner69]

James Hardie announced a boomer profit this morning

ANZ the starvregiob ."….No specific dollars mentioned but NZ seems to have really well …..including decent margin expansion

Fletchers will doing well …how well we’ll know soon

[Greekwatchdog]

Thanks for that Winner. 16 Th Feb "D Day". I am expecting similar to last years first half bearing in mind 10 week shut down.

[Rawz]

I’ve got FBU in the 2022 comp and have recently increased my holding. FBU and STU to have cracking results

[freebee]

FBU share price dropping and hit 12 month low today of $6.28, good buying or punters not optimistic of HY results next week?

Disc: holding and bought more today

[Greekwatchdog]

For Barrs preview ahead of HY 16/02

OUTPERFORM


Fletcher Building (FBU) will report its 1H22 result on Wednesday, 16 February. Despite a lockdown, we expect FBU had a strong first half underpinned by robust demand. Whilst FBU will have incurred some costs from plant shutdowns we expect EBIT to be +5% with strong contributions from Building Products and Steel. Outlook statements are likely to include an Omicron caveat. We believe recent share price weakness reflects concerns around a slowing housing market. However, given the pipeline of work to be done, demand for materials is likely to remain robust for a prolonged period. With FBU trading on a 12-month forward P/E of 11.5x we reiterate our OUTPERFORM rating.


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NZX Code FBU
Share price NZ$6.45
Target price NZ$8.20
Risk rating Medium
Issued shares 816.6m
Market cap NZ$5,267m
Avg daily turnover 1,014k (NZ$7,274k)
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Financials: Jun/ 21A 22E 23E 24E
NPAT* (NZ$m) 413.0 415.3 461.2 499.7
EPS* (NZc) 50.3 50.9 59.1 64.0
EPS growth* (%) n/a 1.0 16.1 8.4
DPS (NZc) 30.0 32.0 38.0 42.0
Imputation (%) 0 59 53 52
*Based on normalised profits
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Valuation (x) 21A 22E 23E 24E
PE 12.8 12.7 10.9 10.1
EV/EBIT 10.6 10.4 9.9 9.1
EV/EBITDA 6.9 6.7 6.5 6.1
Price / NTA 2.0 2.0 1.9 1.8
Cash div yld (%) 4.7 5.0 5.9 6.5
Gross div yld (%) 4.7 6.1 7.1 7.8
Key things to look for in 1H22 result:
Robust NZ core demand: We expect FBU will have experienced pockets of strength in key businesses such as steel, plasterboard and insulation. FBU's domestic production has likely won share from importers given supply chain issues.
Australia turning around slowly: We saw some half-on-half benefit from significant Australian restructuring in FY21 and we expect to see continued improvement in 1H22 underpinned by a robust demand backdrop.
Cost pressure: FBU is likely facing a number of inflationary cost pressures. However, given domestic manufacturing and the strong demand backdrop we believe this is largely being offset with price and share gains from lower import competition.
FY22 guidance: Due to COVID-19 uncertainty FBU is yet to prove any quantitative FY22 earnings guidance. In line with prior years, we expect guidance to be provided although the range may be wider than normal given the Omicron uncertainty in NZ. FBU's current trading and outlook comments will be of key interest to the market given the slowing NZ housing market.

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