FBU - Fletcher Building

[Schrodinger]

Good point. Has there been an announcement on the expected insurers assessment and judgement timing?

[Balance]

Good point. Has there been an announcement on the expected insurers assessment and judgement timing?

"On 22 October 2019 there was a significant fire at the NZICC project construction site causing damage to both the International Convention Centre and Hobson Street Hotel.

Contract Works and Third Party Liability insurances are in place on the project, and the Fletcher Construction Company Limited is an insured party under these policies.

Insurers for the project have confirmed that, based on their assessment to date, the Contract Works insurance policy will respond to loss and damage resulting from the fire.

In December 2019, the insurers made a progress claims payment under this Contract Works policy.

TheThird Party Liability insurance policy is expected to respond where legal liability exists and cases are being reviewed on a claim-by-claim basis.There are no third party claims or legal proceedings in respect of this matter that require additional provision in these financial statements.

The NZICC project continues to be accounted for under NZ IFRS 15: Revenue from Contracts with Customers and NZ IAS 37: Provisions, Contingent Liabilities and Contingent Assets.

The Group has assessed all relevant known facts and circumstances related to the estimation of cost to complete and insurance recoveries and concluded based on current information that there is no impact to the NZICC forecast project loss as a result of the fire.The assessment required key judgments and estimates (including an assessment of the cost to complete remediation, the likelihood of receipt of insurance recoveries and quantification of any claims and costs that it is probable insurance will not cover) and as such is subject to change as the project progresses.The current estimated cost to complete is within insurance indemnity limits.

[Balance]

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

Closed up on the day’s high of $5.41 on reasonable volume. Guess the market liked the presentation by the company.

Interesting to watch the sp now for the next 2 weeks to see how the international investors respond to their meetings with FBU executives.

Then there’s the share buyback kicking back in.

[Balance]

Up again today - looks like FBU's turnaround story may be getting traction with the institutions out there.

I think we will see $6.00 by the time their roadshow to fund managers around the financial capitals is completed over the next 2 weeks.

[value_investor]

https://www.zerohedge.com/markets/bu...-ebitda-report

Charlie Munger's hatred of EBTIDA or any 'adjusted' earnings always makes me think of FBU and chuckle a little bit. He once also called it "earnings before all the important stuff".

"Earnings before significant items" is not a legitimate reporting metric but FBU uses it some sort of bottom line reporting metric.

On page 2 of the earnings presentation, there is a caveat in size 8 font that reads like a terms and conditions:

"In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of the impact of significant items and/orthe results of the businesses divested in the year ended 30 June 2019."

Buyer beware.

[winner69]

https://www.zerohedge.com/markets/bu...-ebitda-report

Charlie Munger's hatred of EBTIDA or any 'adjusted' earnings always makes me think of FBU and chuckle a little bit. He once also called it "earnings before all the important stuff".

"Earnings before significant items" is not a legitimate reporting metric but FBU uses it some sort of bottom line reporting metric.

On page 2 of the earnings presentation, there is a caveat in size 8 font that reads like a terms and conditions:

"In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of the impact of significant items and/orthe results of the businesses divested in the year ended 30 June 2019."

Buyer beware.

You got to be forward looking value ......hence normalised / exc significant items blah blah gives you a better picture of reality they say

Fletcher’s (abd some others been doing that for years

[Balance]

Charlie Munger's hatred of EBTIDA or any 'adjusted' earnings always makes me think of FBU and chuckle a little bit. He once also called it "earnings before all the important stuff".

"Earnings before significant items" is not a legitimate reporting metric but FBU uses it some sort of bottom line reporting metric.

On page 2 of the earnings presentation, there is a caveat in size 8 font that reads like a terms and conditions:

"In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of the impact of significant items and/orthe results of the businesses divested in the year ended 30 June 2019."

Buyer beware.

Actually, the biggest put-down of EBITDA happened during the Enron era. EBITDA was described as an acronym for 'Earnings Before I Totally Duped Auditors'.

Like all valuation methods (PER, Dividend yield, NTA, P/Book, Enterprise multiple, free cashflow etc etc) used by analysts and the market, extreme care needs to be exercised when using any of the valuation techniques.

EBITDA is used extensively for valuations in takeover situations - as the acquiring company may be able to/can access debt and replacement fixed assets at far superior terms than the taken over entity.

But where did you see FBU using EBITDA in its presentations extensively?

From what I read, FBU uses EBIT which (after Enron and the demise of Arthur Anderson for happily signing off falsified accounts) is used extensively by all companies as a measure of earnings from operations.

[winner69]

https://www.zerohedge.com/markets/bu...-ebitda-report

Charlie Munger's hatred of EBTIDA or any 'adjusted' earnings always makes me think of FBU and chuckle a little bit. He once also called it "earnings before all the important stuff".

"Earnings before significant items" is not a legitimate reporting metric but FBU uses it some sort of bottom line reporting metric.

On page 2 of the earnings presentation, there is a caveat in size 8 font that reads like a terms and conditions:

"In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of the impact of significant items and/orthe results of the businesses divested in the year ended 30 June 2019."

Buyer beware.

Mind you your heroes use a thing called ‘operating earnings’ instead of proper NPAT

[Balance]

Mind you your heroes use a thing called ‘operating earnings’ instead of proper NPAT

Almost all companies use operating earnings - being EBIT or EBITDA - to measure underlying operational profits.

Interesting indeed W69 that several of the 'darling' companies on the NZX like Ebos & AIA have EBITDA peppered all over their recent results presentations?

Likewise, ATM!

[flyer]

Sub $5, watching.