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  1. #1021
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Balance View Post
    Putting my post ('all views are welcome") in context:

    https://www.sharetrader.co.nz/showth...-Serko/page102





    Serko put on 40% after the postings above.

    In life, you have to stick with your own views after considering other views, be them negative or positive.
    Absolutely - and sometimes you will be right and sometimes you will find you are wrong.

    Glad for you it worked out for you this time. Markets currently in some unreal lala-land and absolutely separated from reality. Good for the people who took the gamble.

    Does not change the fundamentals, though, doesn't it?
    ----
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  2. #1022
    Legend Balance's Avatar
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    Quote Originally Posted by BlackPeter View Post
    Absolutely - and sometimes you will be right and sometimes you will find you are wrong.

    Glad for you it worked out for you this time. Markets currently in some unreal lala-land and absolutely separated from reality. Good for the people who took the gamble.

    Does not change the fundamentals, though, doesn't it?
    Agreed.

    And your perception and assessment of fundamentals are different from others.

    Which is why the market is such a lively and exciting place to price stocks of course!
    Last edited by Balance; 11-06-2020 at 07:00 PM.

  3. #1023
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    Just bought the dip at $3.55... What a bargain! Thanks to the US correction today!
    Still waiting patiently for the US equities to come back down so i can put some money to work over there though...

  4. #1024
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    Wondering when there is going to be an update on the banking covenants...?
    ie: whether they comply or not...

  5. #1025
    Legend Balance's Avatar
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    Quote Originally Posted by Checkmate View Post
    Wondering when there is going to be an update on the banking covenants...?
    ie: whether they comply or not...
    Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!

    https://www.nzx.com/announcements/355440

    Fletcher Building today announced its intention to make an early repayment of US$300 million of USPP notes.

    CEO Ross Taylor said that the USPP notes, which were issued in 2012 and due to mature in 2022 and 2024, were the Company’s most expensive source of debt, with an average cost of funding of 5.4%. Repayment of the notes would reduce the Company’s funding costs by cNZ$17 million per year, whilst still leaving the Company with significant liquidity of cNZ$1.1 billion.

    The USPP 2012 notes have a notional value of US$300 million. After taking account of foreign exchange and interest rate derivatives held by the Company in respect of these notes, the repayment amount to be made by the Company is expected to be cNZ$350 million.

  6. #1026
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    Quote Originally Posted by Balance View Post
    Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!

    https://www.nzx.com/announcements/355440

    Fletcher Building today announced its intention to make an early repayment of US$300 million of USPP notes.

    CEO Ross Taylor said that the USPP notes, which were issued in 2012 and due to mature in 2022 and 2024, were the Company’s most expensive source of debt, with an average cost of funding of 5.4%. Repayment of the notes would reduce the Company’s funding costs by cNZ$17 million per year, whilst still leaving the Company with significant liquidity of cNZ$1.1 billion.

    The USPP 2012 notes have a notional value of US$300 million. After taking account of foreign exchange and interest rate derivatives held by the Company in respect of these notes, the repayment amount to be made by the Company is expected to be cNZ$350 million.
    Just saw this! Great news, shows the company is still in a pretty strong position financially and is reducing costs for the future.

  7. #1027
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    Quote Originally Posted by Balance View Post
    Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!
    FBU's management did something well? I'm shocked, I tell you. Just shocked.

  8. #1028
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    Quote Originally Posted by Checkmate View Post
    Just saw this! Great news, shows the company is still in a pretty strong position financially and is reducing costs for the future.
    The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

    https://www.nzx.com/announcements/354406

    "Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

    Maybe, just maybe there could be a dividend paid later in the year!

  9. #1029
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    Quote Originally Posted by Balance View Post
    The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

    https://www.nzx.com/announcements/354406

    "Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

    Maybe, just maybe there could be a dividend paid later in the year!
    My pick divvy is out for this FY to be reported in later in Aug. They're setting up for divvy to be paid out from FH 21 onwards.

  10. #1030
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    Quote Originally Posted by sb9 View Post
    My pick divvy is out for this FY to be reported in later in Aug. They're setting up for divvy to be paid out from FH 21 onwards.
    I think you are right.

    But if FBU ever wants to draw a line between the wretched recent past (as in the last 4 years) and a brighter future under new management, paying a dividend for F20 would do it.

  11. #1031
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    Quote Originally Posted by Balance View Post
    The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

    https://www.nzx.com/announcements/354406

    "Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

    Maybe, just maybe there could be a dividend paid later in the year!
    Yup! If I read this correctly, they will pay a dividend if they can meet the old interest cover ratios?
    it seems like they will have a better chance at that after the decision to eliminate all of that unfavourable debt.

  12. #1032
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    The US investors will be loving this. Cash back plus penalty for early repayment and no longer having to be exposed to the New Zealand building sector. The covid environment has made this an easy sell by the FBU Treasury boys.

  13. #1033
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    http://nzx-prod-s7fsd7f98s.s3-websit...611/325647.pdf

    $168m extra payments ($83m + $85m) to FBU for delays to the highway construction.

    Guess FBU is learning NOT to do fixed price contracts!

  14. #1034
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    Quote Originally Posted by Balance View Post
    http://nzx-prod-s7fsd7f98s.s3-websit...611/325647.pdf

    $168m extra payments ($83m + $85m) to FBU for delays to the highway construction.

    Guess FBU is learning NOT to do fixed price contracts!
    Interesting movement today in sp, whole market seem to be either going up or sideways, but this one is taking a bit. Took the opportunity to add few more into kitty.

  15. #1035
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    Any thoughts on earnings? Also if Fletcher announces that they will pay a final dividend would it boost the SP? Iím getting sick of watching everything else in the market rise while Fletcher gets hammered.

  16. #1036
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Checkmate View Post
    Any thoughts on earnings? Also if Fletcher announces that they will pay a final dividend would it boost the SP? Iím getting sick of watching everything else in the market rise while Fletcher gets hammered.
    Earnings - What do you mean? Just listen to the market ...

    Seriously - given that they said end of May that things did run to plan until end of March (which was admittedly not a very exciting plan, but still with a black number at the bottom) and then came 2 months or so basically without revenue in NZ (and reduced revenue in Australia - I would not be too hopeful.

    Not sure which FY will need to carry the redundancy costs for the announced staff reductions (probably FY2021) but anyway - they will cost money ...

    On the bright side - I think that this FY will be better for FBU than next. Enjoy it while it lasts.

    Still more positive ... while I don't think that FBU is a good company (because it isn't) - I could see potential opportunities to consider them in a year or so from now for the dogs of the NZX portfolio ...
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  17. #1037
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    Election year, let's wait for billions dollar projects announcements...

  18. #1038
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    Quote Originally Posted by Stock888 View Post
    Election year, let's wait for billions dollar projects announcements...
    But don't forget FBU's recent performance. The bigger the project, the bigger the disaster!

  19. #1039
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    Seems like there are a lot pessimistic people here, thatís good news for FBU buyers IMO there is value here, the market is very experienced in undervaluing solid companies. All I see is a low price/book and a long history of solid income and dividends, a couple of bad years just means time to buy cheapies. Eventually the funds will start adding Fletcher Building (probably when it isoverpriced).

  20. #1040
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    Quote Originally Posted by Checkmate View Post
    Seems like there are a lot pessimistic people here, thatís good news for FBU buyers IMO there is value here, the market is very experienced in undervaluing solid companies. All I see is a low price/book and a long history of solid income and dividends, a couple of bad years just means time to buy cheapies. Eventually the funds will start adding Fletcher Building (probably when it isoverpriced).
    FBU share price was under 3 bucks at the turn of the century and market sentiment was just like it was today ....big company all unloved and unwanted

    In the next 6 years or so the share price went to about 12 bucks ...one of the best long term trades Iíve ever had.

    Charts said sell and then the GFC hit. The company didnít fare too well Post GFC ....maybe the coming big recession wonít go them any favours

    Been watching ever since but havenít really seen enough to be tempted to have another go at 4 bagger
    ďJust consider that maybe the probability of you being wrong is higher than you think.Ē

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