FBU - Fletcher Building

[Toddy]

The Board has some of the best business compliance brains in NZ.

The blame is at the operational lever, heads of divisions.

For example, how come the provisions are always surprises when clearly they do not happen overnight. Good accounting from management project accounting to financial accounting surely would show progressive cost blow outs and red flags.

Why does it always take the preparation of the half year and annual accounts to bring these issues to a head.

Is it the systems or the people that are just not up to the job.

Something needs to change. The poor shareholders carry the can for this incompetence.

Yes, the Board has a major role to play. But its clear that the right information is not making its way to the board room.

[thedrunkfish]

These are all questions that should have been drilled down into long before now and thus the buck stops with the upper management.

If the division head lets this happen they should be down the road as well as down the management chain below that allowed it, totally unacceptable. Unfortunately the business like many others has suffered with middle management bloat, many of whom are totally unaccountable and therefore useless.

I think Fletchers may be the first of many businesses who will need to sharpen their operations heavily in the next 12 months, invest and grow the profitable parts of the business and be ruthless in cutting what isnt. Diversity and inclusivity is all well and good when your making money......

[Sideshow Bob]

https://www.nzx.com/announcements/426113

NZ RegCo refers to the announcements released yesterday, Monday, 12 February 2024 regarding the application of a trading halt on Fletcher Building Limited (“FBU”) ordinary shares at the request of the issuer.

FBU is considering a number of matters, relevant to information to be released on Wednesday, 14 February 2024, including:

FBU’s half year results, including potential provisions and impairments;
earnings guidance for the full year, which FBU has indicated is likely to materially vary from current analyst forecasts;
FBU’s determination of the level of interim dividend or if no dividend will be paid; and information about the position of the CEO of FBU.

FBU has advised NZ RegCo that it intends to release this information before market open tomorrow, Wednesday, 14 February 2024 to be followed by an investor call at 11:00am. FBU will release full details about that investor call tomorrow morning.

FBU has advised NZ RegCo that the investor call is expected to conclude by midday on Wednesday, 14 February 2024. NZ RegCo considers it appropriate for additional time to be provided following the conclusion of the investor call, to enable investors and the market to consider and assess the information released by FBU and the commentary provided at the investor call.

Accordingly, NZ RegCo confirms that it has exercised its discretion and the halt will remain in place until 12:30pm on Wednesday, 14 February 2024.
Please contact NZX Product Operations on +64 4 496 2853 or productoperations@nzx.com with any queries.
ENDS

[Sideshow Bob]

Hassall and Taylor both going....

https://www.nzx.com/announcements/426125

Auckland, 14 February 2024: Fletcher Building Ltd (“Fletcher Building” or “the Company”) today announces that Group Chief Executive Officer (CEO) Ross Taylor has given notice to the Board of his retirement and that as part of a Board renewal review being undertaken, Chairman Bruce Hassall will step down from the Board at the Company’s Annual Shareholders Meeting later this year.

An international and domestic search for a new Group CEO will be progressed, leveraging the Company’s succession plan. The search process will be led by Non-Executive Director Barbara Chapman who Chairs the Company’s People and Remuneration Committee.

Mr Taylor has a six-month notice period, which he will serve in full if required, to facilitate an orderly handover to his successor.
Fletcher Building Chairman Mr Bruce Hassall said, “The Board, Ross and I believe it is in the best interests of the business and the team that he handover to a new leader and that I hand over to a new Chair at the time of the ASM in October.”

The Board thanks Bruce and Ross for their leadership and contribution since 2017. During this period, they have led the turnaround of Fletcher Building which has seen the core businesses becoming more focused and profitable, with improved earnings, margins and returns. The Company has a growth strategy in place and is focussed on progressing the close out of construction legacy projects and developing an industry solution for the Perth plumbing issue.

Mr Taylor said, “Fletcher Building is a great business, and it has been an honour and pleasure to have the opportunity to work with such a committed team of people. I remain committed to the business and facilitating a smooth and orderly transition to my successor who will be able to focus on leading the organisation through the next strategy cycle and beyond.”

ENDS

[Sideshow Bob]

https://www.nzx.com/announcements/426123

Auckland, 14 February 2024: Fletcher Building Limited today announced its financial results for the first half of FY24.

• Revenue of $4,248 million, down 1% from $4,284 million in HY23
• EBIT before significant items of $264 million, down 27% from $360 million in HY23
• EBIT margin of 6.2%, down from 8.4% in HY23
• Net Loss After Tax of $120 million (incl. $180 million flagged legacy provisions and $122 million non-cash write-down on Tradelink) compared to Net Profit After Tax of $92 million in HY23
• Underlying trading cash flows robust on good working capital management offset by legacy cash impact

Fletcher Building chief executive Ross Taylor said: “Against the backdrop of materially weaker trading conditions, particularly in the NZ residential sector where volumes declined 20%, Group revenue of $4,248 million was in line with the prior period’s $4,284 million.

EBIT before significant items was $264 million, compared to $360 million in the prior period. The Group reported a net loss after tax of $120 million, compared to a profit of $92 million in the prior period. Disappointingly, the result was heavily impacted by the $165 million significant items provision on the New Zealand International Convention Centre announced on 5 February and a $122 million non-cash impairment and write-down on the Tradelink Australia business.”

In New Zealand, revenue for the materials and distribution divisions (Building Products, Concrete and Distribution) was 8% lower than HY23. However, this compares to overall market volumes which were 15% lower compared to HY23. The market decline was driven primarily by the residential sector, which weakened by around 20%, to which these divisions have a 60% exposure.

Mr. Taylor said: “In a more challenging trading environment, the New Zealand materials and distribution divisions performed solidly. Gross margins remained robust at 29.3% (HY23: 30.3%), with the reduction versus HY23 primarily due to a shift in revenue mix towards the lower-margin commercial and infrastructure sectors. The divisions proactively managed price and costs to help offset increased competitive intensity and ongoing inflationary pressure.

“For our Residential and Development division, the house sales market was a relative bright spot in New Zealand, with improved buyer activity, especially first-home buyers, and a stabilising of house prices after 18 months of decline. Fletcher Residential increased EBIT to $41 million (HY23: $33 million), with 419 units taken to profit compared to 189 in HY23.

“A particular highlight of the half was the performance of the Australian division which delivered EBIT and EBIT margin broadly in line with HY23 despite a softer market. Effective price disciplines and a shift toward higher-margin products saw the gross margin lift to 33.1% (HY23: 31.9%) and overhead costs were 3% lower than the prior period.

“A full review of the Australian Tradelink® business over the half year combined with disappointing results led to a $122 million non-cash impairment and write-down in its carrying value. We have concluded that whilst we believe there is a compelling opportunity for Tradelink, further ownership of the business is not in line with the strategic objectives of Fletcher Building. Consequently, we intend to commence a divestment process for Tradelink shortly.

“Cash flows from operating activities for the Group were an outflow of $126 million, compared to an outflow of $203 million in the prior period. The materials and distribution divisions produced strong first half trading cash flows of $253 million compared to $206 million in HY23, driven by good working capital management and despite the lower earnings.

“Regarding the ongoing Perth plumbing issues, our testing and expert reports on causation continue to show that that the leaks are caused by installation failures and that there is no manufacturing defect. We remain committed to developing a workable and appropriate industry solution.

“Given the current market conditions, the expected legacy cash outflows and in line with the Company’s dividend policy, the Board has made the prudent decision to not declare and pay an interim dividend in order to maintain our balance sheet settings.

“As we look ahead to the remainder of the year, we expect FY24 Group EBIT before significant items to be in a range of $540 million to $640 million, with the mid-point assuming a continuation of current market conditions for the balance of FY24.”

“Finally, I would again like to express my appreciation to our dedicated team for their hard work and commitment, to our customers for their trust and loyalty, and to our shareholders for their ongoing support.”

#Ends

[bull....]

i see why they saying there guidance materially different to analyst's

there ebit guidance is down double digits 10 - 15% on analyst's range
no div down 100% on analyst range

and now we have a new ceo at some stage to wipe cupboard's clean again when they start

[Balance]

Ross Taylor has what is termed ‘Fxxk you money’ from his high pay in the millions of dollars over the last 6 years so he has happily quit and can comfortably retire without having to put up with all the crap coming his way. Many of the crap as a consequence of legacy projects.

[alokdhir]

i see why they saying there guidance materially different to analyst's

there ebit guidance is down double digits 10 - 15% on analyst's range
no div down 100% on analyst range

and now we have a new ceo at some stage to wipe cupboard's clean again when they start

But Allan Gray increased its holding by more then additional 1% ...if thats some consolation ...maybe they see lots of value now ...if u putting this much money then they must be doing very good research too ...surely more then us ?

[Balance]

But Allan Gray increased its holding by more then additional 1% ...if thats some consolation ...maybe they see lots of value now ...if u putting this much money then they must be doing very good research too ...surely more then us ?

Allan Gray is a contrarian investor so situations like FBU are made for them.

[winner69]

But Allan Gray increased its holding by more then additional 1% ...if thats some consolation ...maybe they see lots of value now ...if u putting this much money then they must be doing very good research too ...surely more then us ?

Time for Kingfish to get involved methinks …….Fletchers and Vulcan a good industry pair