Forum Archive Index - May 2001

["i_claudius" <i_claudius@xtra.co.nz>]

Any Fletcher Building experts care to comment/justify?
I'm amazed at FBU's strenght and the lack of market critique after last
week's announcement.
Consider:
WRITEOFFS
Announced 17/05/01      $ 5m    restructuring & redundancy
                                $10m    additional settlement costs re AXA 
Pacific dispute
                                $50m    AXA Pacific settlement
                                $70m-$100m Impairment review writedowns
Previously announced as per FLB information memo on separation from Fletcher
Group

                                $110m   tax benefits written off
                                $ 45m   restructuring & separation costs
Hence $290m to $320m in asset writeoffs already identified..But
wait..there's more..
Yet another independant valuation report has been commissioned so what
should we expect in further writedowns?

Analyst reports I've seen since the 17th May briefing project a full year
Loss to 30/06/01 ranging from $2m to $7m.DCF valuations between $2.40 to
$2.60 and some nervous NTA valuations between $2 and $2.21.
No guidance re maiden dividend or policy for FBU was given.

So why so strong?
-Ralph Waters in as new CEO?OK,good guy but he didn't know any much more
about the company's status and problems than Alexander Tolde did.In fact
considerably less.
-potential takeover action/asset sales?GPG aint going to buy this at
anywhere near this level.When did Ron Brierley ever pay anything approaching
fair value for anything?He's not going to buy this unless significantly
discounted.As for asset sales...there are no "gems' and remember the
incomplete writedowns referred to above.
-Improved operating earnings?About twice the 1HY rate apparently.Fair enough
but they'd need to be all of that and more sustainably going forward.I'd
like to see it demonstrated before I get too warm.And what impact of Ralph
Waters V the "old guard" board and management from here?
-Construction/Infrastructure Development outlook?Improving a little but
still fragile in the near to medium term.

Not too compelling at these levels IMHO.Talk me out of it.

Discl: Ready to short



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