Sharechat Logo

Fletcher Building

Wednesday 16th November 2011

Text too small?

Fletcher Building chairman Ralph Waters says Australasia’s biggest building materials company sees no material improvement in trading in any market except Asia in the first half of 2012, with a risk of a further downgrade if construction volumes fall.

Waters was speaking to shareholders at their annual meeting in Auckland, where he reiterated the company’s forecast last month for a 10 percent decline in first-half profit to $166 million, and no growth in full-year earnings, before one-time items, from last year’s $359 million.

“These are challenging times. I have not seen so many western countries in economic difficulties in my 40-year corporate lifetime,” Waters said in a speech notes for the AGM. “In New Zealand, that is exacerbated by the tragic circumstances of Canterbury.”

Shares of Fletcher Building fell 2.5 percent to $6.24, a 2 ½-year low. Waters said the weak share price was disappointing. The shares are rated ‘outperform’ based on a Reuters poll, with a price target of $7.51.

The company had hoped for a sustained pick-up in economic activity in New Zealand through 2011. Instead, building consents fell to a record low in the first quarter.

“With interest rates at 45-year lows and weak demand for new housing it is difficult not to conclude that consumer confidence has yet to recover,” Waters said.

While commercial building proved stronger, overall activity was flat and government-funded infrastructure projects “continued to underpin the construction industry,” he said.

The Australian market started the year on a stronger footing but deteriorated in the second half while no improvement has been seen in the US or Europe. Asia, excluding flood-hit Thailand, has “continued to achieve strong growth,” he said.

The company’s revised forecasts assume no further deterioration in its key markets.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Fletcher Building faces probe into plasterboard supply deals
Fletcher closes Christchurch plasterboard plant after finding asbestos
Fletcher Building names Charles Bolt as general counsel, replacing Farrell
Fletcher beats estimates with $326M FY profit as NZ revives, Australia stays flat
Fletcher executive Worley leaves as underperforming Crane unit brought in-house
Fletcher puts strategy under microscope seeking $70M annual gain, will shed jobs
Fletcher Building 1H profit edges up
Fletcher Building capital notes rollover at 5.4 percent from 8.9 percent
Fletcher Building offloads CSP Coating galvanised steel unit
Fletcher not abusing its role running Canterbury home repairs, EQC says