FBU - Fletcher Building

[Sideshow Bob]

Fletcher Building announces FY20 half year results and dividendAuckland, 19 February 2020: Fletcher Building today announced its results for the first half of FY20.Summary:
- Revenue of $3,961 million, in line with market conditions
- EBIT before significant items of $219 million, compared to $248 million in HY19
- Net Profit After Tax of $82 million, compared to $89 million in HY19
- Balance sheet remains strong, with improved cash flow
- Interim dividend of 11 cents per share declared, to be paid on 9 April 2020
- FY20 Group earnings guidance in the range of $515 million to $565 million reconfirmedFletcher Building Chief executive Ross Taylor said: “HY20 results are in line with our expectations and those set out at our Annual Shareholders’ Meeting in November 2019. Our business is now stabilised and focused, providing the foundation to drive consistent performance and growth into the future.”Group revenue was $3,961 million, 5% down on HY19 as anticipated, owing to reduced revenue on legacy construction projects and tougher market conditions in Australia. EBIT before significant items was $219 million. Trading cashflow from continuing operations (excluding legacy projects) increased to $88 million from $36 million in HY19 due to ongoing improvements in working capital.“Our New Zealand core businesses outside of Steel delivered a solid performance, with earnings in line with last year and improved operating margins in several areas. In Steel, trading conditions remain challenging, though we have seen volumes and margins improving as we enter the second half. “Residential house sales are benefiting from strong demand, with a large volume of committed sales due for settlement in the second half. Construction has secured new work in target areas, and there is no change to the legacy project provisions. Insurance will respond to loss and damage to the NZ International Convention Centre caused by the October 2019 fire, and an extensive work programme to determine the rebuild plan, timeframes and cost is now underway.“In the context of a challenging Australian market, we are seeing the benefits of the cost out programme, as well as our investments in digital and product innovation flowing through. With the reset well advanced, we have assessed our portfolio and decided to divest the Rocla business and are now focused on driving growth and operational performance in our other Australian businesses. The sale process is expected to be completed through calendar 2020.“We continue to make investments in innovation and local manufacturing to drive long-term, sustainable growth for our shareholders. “An example of this is the new state-of-the-art plasterboard facility we are building in Tauranga, Bay of Plenty, which we also announced today. The facility is a firm commitment to local manufacturing, which will enable us to meet customer demand for the long term. It will also create around 100 permanent regional jobs and supports our goal of reducing carbon emissions by 30% by 2030.“Our balance sheet remains strong, with our leverage ratio below the bottom end of our target range.“In September 2019 we commenced an on-market share buyback of up to NZ$300 million to deliver value to shareholders. We continue to make good progress and have acquired 27.9 million shares for $141 million, representing 3.3% of issued capital.“The Board has declared an interim dividend of 11 cents per share. This will reflect a more normal first-half, second-half weighting for FY20 and will be paid to shareholders on 9 April 2020.“As reported at the Annual Shareholders’ Meeting, Group EBIT (excluding significant items) for FY20 is expected to be in the range of $515 million to $565 million with earnings weighted to the second half owing to the Australian cost out programme benefit, residential settlements and improved steel performance flowing through,” concluded Mr Taylor

[Schrodinger]

"Insurance will respond to loss and damage to the NZ International Convention Centre caused by the October 2019 fire, and an extensive work programme to determine the rebuild plan, timeframes and cost is now underway."

Misleading statement and potentially fraudulent.

Anyone know how much SkyCity has paid to FBU so far for the project?

[peat]

i guess the good news is that there was no more bad news. yet.

[Poet]

Hmmm, and this from the NBR

“The current estimated cost to complete is within insurance indemnity limits,” it said.
However, “certain costs resulting from the fire may fall outside the scope of the Contract Works and Third Party Liability policies, with the possibility that recovery may be sought from the group.”
Fletcher’s NZICC client SkyCity said last week if insurance did not cover the cost of completing the build it would seek to make recovery from Fletcher.
Other than the NZICC, all its loss-making legacy projects would be complete by June, said Fletcher.

[peat]

responding to a claim doesnt imply agreement on quantum

[Balance]

responding to a claim doesnt imply agreement on quantum

Listening in on the web cast - I thought Ross Taylor answered the question on NZICC rather well.

Underlying tone of conference call - confident and positive as webcast ran overtime as they fielded heaps of questions from the analysts.

Sounds like FBU will be meeting analysts over next 2 weeks around the financial capitals to run through results and outlook.

[Schrodinger]

I would like to point out that Ross' and FBU's opinion is irrelevant to the ICC. He is at the mercy of the insurers and SKC. I would be watching them rather than FBU. The insurer holds the money and SKC will be the multiplier.

[Balance]

I would like to point out that Ross' and FBU's opinion is irrelevant to the ICC. He is at the mercy of the insurers and SKC. I would be watching them rather than FBU. The insurer holds the money and SKC will be the multiplier.

Correct.

He can only give his opinion as to how the claim is going to be settled, based on the insurance policy and put his credibility on the line - mindful of the fact that the others before him came out looking stupid and ended their careers pre-maturely!

[Beagle]

I would like to point out that Ross' and FBU's opinion is irrelevant to the ICC. He is at the mercy of the insurers and SKC. I would be watching them rather than FBU. The insurer holds the money and SKC will be the multiplier.

Agree. Where there's smoke there's fire. (opps that was an unfortunate cliché). Already there's hints insurance won't cover all of it which is code for this is going to be a serious problem going forward.
Whenever FBU have hinted at problems before it always turns out MUCH worse.

[Balance]

Agree. Where there's smoke there's fire. (opps that was an unfortunate cliché). Already there's hints insurance won't cover all of it which is code for this is going to be a serious problem going forward.
Whenever FBU have hinted at problems before it always turns out MUCH worse.

What happened to the workers' union agitating for compensation for breathing in toxic fumes btw?

Asking because it all seems to have died down and there has been no news.

I have not bothered to follow as unions only do one thing - keep the executives there in cushy jobs* and power. Sounds like Cindy & the Labour Party actually!

* Talk to Rob Campbell if you do not believe! He left his all powerful job in the Union where he was feared - figured he might as well become a multi-millionaire and be a real power-broker instead of wasting his time and energy with the union and the other useless union 'leaders'.