Tag Archives | Fletcher Building

Guidance kicks Fletcher share price down as new chiefs present positive outlook at annual meeting

on Wednesday 21 November 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ

Fletcher Building Ltd’s positive annual meeting presentation yesterday was overshadowed by a cut in profit guidance, taking the share price down 11.2% from $5.55 at the close on Monday to end Tuesday at $4.93.

Over 12 months the share price has fallen 25%. The price is now less than half the level of 2 years ago, when it was just off its peak at $10.64. That’s a shrinking of about $4.8 billion in market capitalisation to yesterday’s closing $4.2 billion.

It also closes the windfall margin shareholders had when they bought into Fletcher’s $750 million capital-raising in April-May at $4.80/share.

The company released its guidance through the NZX at 8.30am, so the share price was already tumbling as shareholders filed into the Eden Park South Stand for the meeting 2 hours later.

10% earnings drop forecast

Fletcher Building chief executive Ross Taylor.

Chief executive Ross Taylor said that, based on trading to date, half-year ebit (earnings before interest & tax) to 31 December, before accounting for significant items, would be down 10%. The year-ago figure also excluded the losses that were starting to appear in the company’s building + interiors division.

“This [lower guidance] is due to emerging challenging Australian trading conditions and the timing of house sales in the residential division to date. There is no change to the B+I provisions announced in February 2018,” Mr Taylor said.

Mr Taylor put the full-year guidance through to June 2019 in a range of $630-680 million of ebit excluding significant items, and then poked holes in the forecast, expressing doubt that it would be anywhere near the top of that range.

“While the company continues to target a result at the top end of this range, it is prudent at this stage in the year to highlight that ebit will be impacted by the outage at the Golden Bay Cement plant, the slowdown in the Australian residential market and the reduction in land development earnings compared to last year,” he said.

The company aims to resume dividend payments, but Mr Taylor didn’t say whether that intention was for the first half or second half. In any case, it would depend on “satisfactory trading conditions & group cashflows”.

He’ll give an update on that when the half-year results are released in February.

Mr Taylor said the company hadn’t changed its policy of paying dividends in the range of 50-75% of net earnings before significant items, with consideration of available cashflow in the same period.

Another grand vision laid out

New Fletcher Building chair Bruce Hassall.

All that information made the opening gambit in new chair Bruce Hassall’s presentation to the opening meeting rather presumptuous. Fletcher Building’s vision, he said, was “to be the undisputed leader in New Zealand & Australian building solutions, with products & distribution at our core”.

Fletcher Building, and Fletcher Challenge before it, has a history of over-extending then pulling back. That took it into forestry businesses in North America, construction in Hawaii and the acquisition of UK Paper, and more recently into acquiring major businesses such as Roof Tile Group, sold 3 weeks ago, and Formica, now on the block.

A month ago Fletcher Building saw an opportunity to take over also-troubled-but-regathering Steel & Tube Holdings Ltd, but was rebuffed and withdrew.

“We have the skills & experience to govern now”

Despite the group’s turmoil, Mr Hassall & Mr Taylor presented an upward path. Following the appointment of former Kiwi Rail chief executive Peter Reidy as Fletcher’s construction chief executive, plus the appointment of 5 new directors in September, Mr Hassall told the annual meeting: “We feel that we have the skills & experience we require to govern this company. I am confident that the makeup of the board & the governance refresh, along with executive appointments, will ensure appropriate oversight of the business, and leadership as we focus on building shareholder value.”

My immediate response to that vision to be the undisputed leader in New Zealand & Australian building solutions, with products & distribution at the core, was: Where, in that, is there a place for construction? Further into the presentation, Mr Hassall said residential activity accounted for 44% of the group’s New Zealand revenue – but that’s more as a supplier than as a builder.

The company’s analysis shows consents for new homes peaking at around 32,000/year this quarter, and slipping slightly in the March quarter.

In Australia, the picture is more concerning. Residential activity accounts for 40% of the group’s revenue there, and in the last few weeks there have been dire predictions of sharp decline in residential construction and in housing prices. The federal government is now taking the calls to ease back its heavy immigration programme more seriously.

Despite the apparent market declines in both countries, Mr Taylor said the lower sales volumes by Fletcher Living in New Zealand were the result of longer settlement times & the timing of available stock rather than evidence of a market downturn.

A chart of strategy timeframes showed the remaining 8 major vertical construction projects should be completed in the 2020 financial year, and the building & interiors division returned to profit.

Cashflow up, debt down

On performance in the year just gone, Mr Taylor said the New Zealand businesses lifted revenue 7%, led by building products & distribution, and Australian revenue rose 9%.

The net result of the improved underlying cashflows & the $750 million capital-raising was that net debt was cut by a third to $1.27 billion.

On current market conditions, he said there were signs the Auckland residential market would pull back shortly and, in Australia, a sharp contraction was affecting businesses, particularly laminates & apartment sector.

Fletcher Living house sales were lower than expected, but this was a stock issue rather than a market issue – longer time to settlement, and timing of available stock.

For the 2019 financial year, Mr Taylor said: “We are concentrating on getting the overall business refocused & stabilised. We want to exit the year with good momentum & performance in our core New Zealand businesses, getting all the construction businesses set up to perform, while keeping them within the provisions we made in 2018.

“If we do this well, then in the 2020 financial year we would expect to see signs of performance improvements & market share gains across all our businesses, which will in turn set us up for growth from the 2021 financial year & beyond.”

Mr Taylor said he was attracted to the Fletcher Building chief executive role because he could see a lot of potential for the business, “and having been on the inside now for 12 months, I am even more convinced about this”.

He pointed to a few reasons, which he saw presenting strong opportunities:

Innovation in the residential sector through off-site manufacturing solutions
Ecommerce & digitisation processes being implemented across distribution businesses, and
Product & process innovation across many other areas of business.

Links:
Fletcher Building annual meeting, 20 November 2018, webcast
Annual meeting documents & guidance
Presentation
Chair’s written address
21 June 2018, Fletcher Building strategy presentation slides

Attribution: Presentations.

Fletcher Building top table looks revitalised, but shareholders skip scrutiny

on Wednesday 21 November 2018 in Fletcher Building, Gainz, Mangere, Neighbourhoods, Sectors, Securities – NZ, South

Fletcher Building Ltd’s annual meeting at Eden Park today was a good one, for many reasons.

It was also a bad one, for a couple of very important reasons.

It had some stage-managing, but it also had some frank views from the new helmsmen, clear statements of ambition & about the expertise to carry that ambition through from 5 new directors & one up for re-election, and Ihumatao protesters politely asking questions (and asking more questions than the rest of the shareholders there).

The losses the company has incurred ($191 million net for the last financial year) wounded a company that has a long history of strutting.

Sometimes in that situation, companies say they are changing – but don’t. Much has been made (including on this website) of the lack of construction nous on the board, but today there was evidence of new attitudes.

New Fletcher Building chair Bruce Hassall.

Bruce Hassall, former senior partner & chief executive at accountancy firm PwC NZ, took over the chair at Fletcher on 1 September from Sir Ralph Norris, who resigned from both chair & board. The one other director not up for election or re-election was Tony Carter. Mr Hassall – not culpable for the disastrous downturn – ran a smooth meeting, didn’t dodge questions, and asked staff to add to answers.

In the presentations from Mr Hassall & chief executive Ross Taylor, and the brief speeches from the 6 directors facing election – and even just from the fact that the company has 5 brand-new directors out of a total 8 – you could see a new determination to run Fletcher’s affairs far better. Albeit the newbies toed the party line.

Shareholders leave scrutiny to Ihumatao protesters

That point about protesters asking over half the questions is a funny one. They were naturally single-minded, but also apologetic about dominating the meeting.

Longtime sniper Coralie van Camp, second on the roster for questioning directors, wanted all directors standing for election to give their opinion on the Ihumatao subdivision, and all 5 duly said they supported it.

Although new company chair Bruce Hassall initially tried to close Mrs van Camp down, saying this wasn’t the time for general business questions, she stood her ground and made it clear her request was for each of these 6 directors to state their position. They did so, some in detail, all in support of the subdivision proceeding.

9 Protect Ihumatao campaigners & supporters asked questions of the board, and got most of their answers from residential & development chief executive Steve Evans. The answers weren’t what the Ihumatao group wanted to hear, but they were straight & unequivocal responses.

As happened at the Fletcher annual meeting last year, Protect Ihumatao’s practice of popping up with new questioners eventually brought groans from other shareholders.

But what were those other shareholders at Eden Park for? The food trolley, for one thing, and to hear the top table’s view on the year gone & the outlook. But until the final questioner took the microphone, this was not a lossmaking company under deep scrutiny. And the harrumph at the prodding over Ihumatao was a signal to leave it alone, as if to say: ‘We’re investors, here to see our investment is moving forward, even if our directors now want to have a social conscience.’

Top table responds to all protest questions

Listed company boards are encouraged nowadays to act in more socially sympathetic ways, so hearing out the Ihumatao crowd was a proper response. The subdivision land is in an area a short distance from Auckland International Airport which was occupied for hundreds of years before colonisation in the 19th century. Families were driven out, some have returned to push historic claims, but Fletcher Building has won the right to develop through hearings & court proceedings.

Fletcher Building chief executive Ross Taylor.

Chief executive Ross Taylor offered what he said were a few salient comments: “We’re not touching the stonefields site. As we’ve worked in partnership with iwi that have mana whenua for the site, we’ve developed our plans with their consultation. We’ve actually taken part of the site we’re developing and left that undeveloped next to the stonefields site to enhance the entryway.

“We’re actually developing 480 houses on only 25ha. We’ve been through many forums now, both national & international, reviews & both legal processes with the most recent one being the Environment Court. We’ve respected those processes and we’ve actually engaged in those processes over many years, and quite legitimately engaged in them, and effectively all those independent reviews have supported the approach we’ve taken and the way forward on this project.

“So I look at all that – and then you could say does the project make sense for shareholders in an economic sense, and that’s where you finally get to after doing all the other stuff first, and it does. “So, as I look at all that, I think we’re behaving appropriately, we’ve been respectful, we’ve respected both the community angst as well as the legal processes and we get to the position that we should move forward with the project, and that’s the position we’re taking.”

To another shareholder, Mr Taylor said he couldn’t give the company’s holding costs on the project, but that the project was still appropriate measured against the weighted average cost of capital.

A questioner said that, 20 years on, Fletcher could be pressured to develop the buffer zone it was leaving. Mr Taylor commented: “The buffer is enshrined in our development approval. We can’t ever touch it.”

Mr Evans added that the company was in discussions on who to hand the buffer zone over to, iwi or Auckland Council.

The Steel & Tube non-deal

Answering an online questioner, who’d asked about Fletcher’s takeover offer for Steel & Tube Holdings Ltd, and had suggested: “Wouldn’t it be wise to get your own house in order before seeking to acquire other companies?” Mr Hassall expanded on the response at the time (5 weeks ago), in which Fletcher questioned the Steel & Tube board’s lack of support to “progress the proposal in a timely manner” and announced that Fletcher was pulling its offer.

Today, Mr Hassall said “there was a window of opportunity” and the offer “was on strategy. We talked around our New Zealand businesses, and growing those and refocusing on the core.

“The second thing. We have a highly performing steel business and we saw an opportunity where we could put those 2 businesses together. They had many complementary product offerings, and also locations, so putting those 2 businesses together created an opportunity to deliver an enhanced customer service & experience right across the whole range of product suites, and also deliver positive return to our shareholders.”

On the question of timing, Mr Hassall said Steel & Tube had just run a formal due diligence process before its capital-raising in September, so Fletcher didn’t have to rerun that process: “There was a window and we took it.”

A boys’ club? We’re getting better at inclusion, says chair

A shareholder asked about “the poor performance of the company over time” and the role of women at Fletcher Building, questioning the claim in the annual report (page 40) that “facilitating an inclusive & motivating working environment for women is important to us. Ultimately, we want to create a culture in which gender diversity in management & our industry is the norm. For this reason we provide targeted development for women within the business…”

In contrast to that statement, the shareholder said, if he looked around the room, “it looks like a boys’ club, and it’s not good enough”. There was no information in the report to support the claim of facilitating a changed environment, pay rates or pay equity: “For a company this size & importance in New Zealand, it’s not good enough. And particularly when you have a large retail company, PlaceMakers, which doesn’t perform that well in my view… where you must have a number of female employees – and if you don’t you should have.”

Mr Hassall countered: “At a board level & as a company we are very focused on the importance of gender, and we’re also focused more generally around the importance of diversity, because it’s important as an organisation that we reflect New Zealand, and particularly that we reflect the customers that we’ve got.

“I think your comment’s a little bit harsh. We’re also an industry that’s heavily dominated historically by males. Now that is changing. But… Fletcher Building has done a lot of really good things in recent years around diversity & women. For example, Global Women, formed a number of years ago, Fletcher Building was one of the principal partners involved in there and it’s still actively involved.

“Around broader diversity, I think we were the first corporate in New Zealand to get the diversity tick. Have we got some more work to do? Of course we do. Do we need to address gender mix across our executive teams, middle-senior management? Yes. Can’t solve it overnight. We have a number of programmes and a number of them are spelled out in the annual report.”

Mr Hassall said Fletcher had a programme on pay equity and would report back on that in the annual report next year: “We are focused on it. In our remuneration of employees, that was one of the things that was taken into consideration, but more work to be done.”

As for PlaceMakers, Mr Hassall told the shareholder: “I do need to pull you up on that. PlaceMakers is one of our best performing businesses, and it’s the star performer in the Fletcher Building group, has been for a number of years and I’m sure will continue to be so… It is an outstanding business.”

After 105 minutes, a modestly probing question

And at the end of it all, longtime listed company investor Robert Gray closed questiontime with a curly one about future liability for late completion of the SkyCity International Convention Centre & Precinct Properties Ltd’s Commercial Bay redevelopment of the downtown block at the foot of Albert & Queen Sts.

Mr Hassall said Fletcher had completed “7, nearly 8” of the 16 building & interiors division projects which had come under the spotlight 2 years ago, resulting in closure of the company’s vertical construction business. “We remain confident with the provisions we’ve established [but] can’t comment on specific projects.”

Mr Gray asked: “Can the company speed up delivery – [for instance] by working longer hours?” Mr Hassall said nothing. Mr Taylor responded: “You & I both wish that.”

And in those 2 questions about construction liability, Mr Gray laid bare the default by the body of shareholders: ‘The leaders had spoken, no further inquiry needed. We made a loss last year, no dividend, all happy.’ That’s how the meeting was, sadly, a bad one.

Earlier stories:
16 October 2018: Fletcher gets miffy over Steel & Tube time to get advice, pulls what was only ever a “non-binding & indicative offer”
5 October 2018: The price was moving, the confidentiality remains, and still-weak Fletcher insinuates Steel & Tube takeover “compelling”
22 August 2018: Updated: A loss, but flow of red ink stops at Fletcher Building
2 March 2018: Fletcher gets US waiver, still negotiating funding terms
21 February 2018: Fletcher half-year loss $322 million
14 February 2018: Another $486 million of losses for Fletcher Building, and Norris resigns
27 October 2017: Sheppard turns Fletcher meeting into “absolution or exorcism” exercise
21 September 2017: A year on, Fletcher board still has ‘construction nous vacancy’ pencilled in
20 March 2017: Fletcher Building cuts earnings guidance by $110 million

Attribution: Annual meeting.

Fletcher Building sells Roof Tile Group at a loss

on Friday 2 November 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ

Fletcher Building Ltd has sold international roofing products manufacturer Roof Tile Group (RTG) to Canadian roofing company IKO Industries Ltd for $US39 million ($NZ59.8 million).

Fletcher Building chief executive Ross Taylor.

Fletcher Building chief executive Ross Taylor confirmed the sale yesterday, and said Roof Tile Group was being sold as one entity. The sale was effective yesterday.

Mr Taylor said the Roof Tile Group sale price would be subject to a post-completion working capital adjustment. Once finalised, it was expected the sale would result in a non-cash loss on disposal of $NZ15-20 million against the current carrying value of the business, to be included in Fletcher Building’s half-year results. This would be incurred as a significant item and therefore not affect previous statements on the outlook for Fletcher Building earnings before interest & tax for the 2019 financial year (before significant items).

He commented: “We are pleased to complete the RTG divestment in a timely way. The sale is in-line with Fletcher Building’s 5-year strategy to divest our international operations to focus our capital & capability behind our New Zealand & Australian businesses, with building products & distribution at our core. The divestment process for the Formica business is progressing well and we remain confident that the sale will be completed in the 2019 financial year.”

Mr Taylor said Fletcher Building had made no decisions about how it would use the proceeds from the 2 sales: “Once both sales have been completed we will review our capital structure & capital requirements and then determine how the funds will be allocated.”

Roof Tile Group manufactures & distributes metal roof tiles, operating under the Gerard & Decra brands. It employs 450 people, manufactures in 4 countries and sells products globally.

Link:
IKO Industries

Attribution: Company release.

Shareholding deal changes landscape at Steel & Tube

on Friday 19 October 2018 in Gainz, Sectors, Securities – NZ, Steel & Tube

Steel & Tube Holdings Ltd goes to its annual meeting next Thursday with Fletcher Building Ltd no longer bidding for a takeover, and an asset manager replaced by NZ Steel Ltd as a large shareholder.

NZ Steel is owned by BlueScope Steel Ltd, of Australia.

NZ Steel’s $45.8 million acquisition of the 15.3% of Steel & Tube controlled by Milford Asset Management Ltd, at $1.7465/share, means Milford private equity investment director John Johnston is no longer standing for election to the board.

Earlier story:
16 October 2018: Fletcher gets miffy over Steel & Tube time to get advice, pulls what was only ever a “non-binding & indicative offer”

Attribution: Company releases.

Fletcher gets miffy over Steel & Tube time to get advice, pulls what was only ever a “non-binding & indicative offer”

on Tuesday 16 October 2018 in Commerce Commission, Fletcher Building, Gainz, Regulation, Sectors, Securities – NZ, Steel & Tube

Fletcher Building Ltd dropped its on-the-quiet attempt to buy fellow NZX-listed company Steel & Tube Holdings Ltd yesterday, 3 hours after Steel & Tube told the exchange a revised offer still undervalued it.

Remarkably, Fletcher blamed the Steel & Tube board’s lack of support to “progress the proposal in a timely manner”.

5 weeks after Fletcher’s initial confidential approach, the Steel & Tube board decided it needed expert advice on Friday’s revised offer that would take 3-4 weeks to confirm.

Fletcher said they’d had “ample time”.

Again, as it did with its initial offer, Fletcher focused on the short-term timeframe of Steel & Tube’s share price, ignoring the turnaround process Steel & Tube has begun after a $38 million annual loss.

Fletcher initially began talks confidentially with the Steel & Tube board, and also with major shareholders in the target company, on its 10 September proposal to make a non-binding indicative offer of $1.70/share for the whole of Steel & Tube.

12 days after Steel & Tube disclosed that offer & its rejection to the market, Fletcher came again with a $1.90/share price tag plus a 5c/share dividend, with imputation credits.

This time, Steel & Tube told the market:

Its advisors’ (First NZ Capital Ltd) view on Steel & Tube’s intrinsic value was between $1.95-2.36/share, excluding the company’s share of synergies, and
The permitted dividend doesn’t adequately compensate shareholders for the extended timeframe realistically required to seek regulatory approvals.

The Steel & Tube board said of the new offer:

“The revised offer of $1.90/share implies an enterprise value (EV) of $341 million and is only an 8.5x multiple of our long-term sustainable earnings, assessed as 2021 financial year ebit (earnings before interest & tax) of $40 million. Comparatively, excluding the company’s share of synergies, our advisors’ valuation range is an implied EV of $346-414 million.
“However, Steel & Tube advises that in light of the revised offer the board is commissioning an independent expert report which will take 3-4 weeks, and will further consult its legal & financial advisors about the implications of the revised offer. Fletcher Building has been advised of this.”

Steel & Tube chair Susan Paterson.

Steel & Tube chair Susan Paterson said: “The revised non-binding indicative offer from Fletchers does not prevent higher value approaches from other interested parties. The board will continue to evaluate strategies & actions that deliver the best value to shareholders and is continuing to focus on executing our turn-around strategy.”

In her letter to Fletcher chair Bruce Hassall & chief executive Ross Taylor, Ms Paterson said: “While we understand you may have indications of some support from a couple of our institutional shareholders, the board needs to consider the interests of all shareholders taken as a whole, and the execution risks inherent in the revised non-binding indicative offer.

“Chapman Tripp continues to advise that the proposed acquisition would face challenging issues for clearance under the Commerce Act, due to Fletcher’s vertical presence & significant size in several steel product markets.”

The sulk

Fletcher said in its withdrawal announcement it had pulled its offer “due to lack of support from Steel & Tube’s board to progress the proposal in a timely manner.

“Steel & Tube has announced that it does not support Fletcher Building’s revised proposal, and that it would need a further 3-4 weeks to confirm this view. Fletcher Building has been engaging with Steel & Tube on a proposal for 5 weeks now, which has provided ample time for the board to seek independent valuation advice.

“During that period, Fletcher Building received support for progressing its proposal from major Steel & Tube shareholders Milford Asset Management & Harbour Asset Management.”

Analysing share price movements with a glass eye

Fletcher said its revised proposal “provided a significant premium of more than 50% to Steel & Tube’s pre-announcement 5-day volume-weighted average price”.

Fletcher Building chief executive Ross Taylor.

Fletcher chief executive Ross Taylor said: “Despite offering what we believe was a very attractive offer to Steel & Tube shareholders, our engagement with the Steel & Tube board has been unsuccessful and, as a result, we have withdrawn the acquisition proposal.

“Based on expert advice, Fletcher Building remains confident the transaction would have received Commerce Commission clearance. Steel & Tube’s market share information released on 10 October doesn’t properly take into account the material impact of direct imported products in relevant markets.”

Steel & Tube Holdings Ltd’s share price rose 11c to $1.34 in the 4 days before it revealed Fletcher Building Ltd’s intention to take it over. On 3 October, the day of the announcement, the price rose another 22c, and 3c more the next day to reach $1.59 – a 36% gain in a week.

The price had fallen to $1.15 at the end of August, tumbling from $1.83 in May & $2.06 in January.

Steel & Tube’s share price dropped to $1.48 a week ago and has since been in a 3c band around that price.

Fletcher’s share price hit a short-term peak of $6.58 on 2 October, the day before Steel & Tube revealed the confidential offer. Since then, the Fletcher price has tumbled to $6.10.

Like Steel & Tube, the Fletcher share price has been hit over the last 2 years by revelations of incompetent management & board control.

On 2 February, 12 days before Fletcher announced an extra $486 million of losses by its Building + Interiors division, accompanied by chair Sir Ralph Norris’s decision to resign, its share price hit a 4-month high of $7.61. It bottomed on 4 April at $5.53 and made it back up to $7.13 on 30 July.

The Fletcher share price had been at $10.19 in November 2016. The company had become aware of deep problems within its vertical construction business over that summer, and the price had dropped to $8.73 by 17 March 2017, the Friday before now-departed chief executive Mark Adamson made the first revelation of the extent of Fletcher’s problems.

Link:
Steel & Tube investor updates

Earlier stories:
5 October 2018: The price was moving, the confidentiality remains, and still-weak Fletcher insinuates Steel & Tube takeover “compelling”
13 September 2018: Steel & Tube bookbuild scaled
30 August 2018: Steel & Tube completes books-clearing, future already brighter
22 August 2018: Updated: A loss, but flow of red ink stops at Fletcher Building
7 August 2018: Updated: Steel & Tube seeks $80.9 million from placement & rights issue, updates guidance
1 July 2018: Fletcher Building exits Sims recycling joint venture
22 June 2018: Australia the next big focus for Fletcher, offsite construction an innovation example
23 May 2018: Review puts Steel & Tube ebit loss at $38 million
14 February 2018: Another $486 million of losses for Fletcher Building, and Norris resigns

Attribution: Fletcher and Steel & Tube releases, websites, NZX.

The price was moving, the confidentiality remains, and still-weak Fletcher insinuates Steel & Tube takeover “compelling”

on Friday 5 October 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ, Steel & Tube

Steel & Tube Holdings Ltd’s share price rose 11c to $1.34 in the 4 days before it revealed Fletcher Building Ltd’s intention to take it over. On Wednesday, the day of the announcement, the price rose another 22c, and 3c more yesterday to reach $1.59 – a 36% gain in a week.

The price had fallen to $1.15 at the end of August, tumbling from $1.83 in May & $2.06 in January.

Both companies have been in serious trouble in the last 2 years, Fletcher Building in its construction division, and especially big-project vertical construction, Steel & Tube turning into a very poorly performing supplier, forecasting a heavy loss in May but clearing its books in August.

Fletcher Building priced its offer at $1.70, a cheeky undervaluation for an entity heading north under its own steam, although Fletcher chief executive Ross Taylor said that – somehow, by being bought out of an enterprise at the start of its journey on a stronger future – the offer was compelling and had the ability to deliver significant value to Steel & Tube shareholders.

That, to me, is arrant nonsense, which is not to say that a large number of Steel & Tube shareholders won’t take today’s money rather than wait for the company to grow on its own account.

Non-binding and Fletcher still wants confidentiality

Fletcher Building proposed acquiring all of Steel & Tube’s shares through a scheme of arrangement. The offer, which Fletcher delivered on 10 September, was non-binding, indicative & confidential. Steel & Tube responded publicly on Wednesday after seeking legal & commercial advice, saying it didn’t support the offer.

Steel & Tube chair Susan Paterson.

Steel & Tube chair Susan Paterson commented: “The fact that Fletchers has made this indicative offer speaks to our reputation & the strength of our business. Obviously Fletchers sees a lot of value in our business & its future potential as the benefits of our turn-around strategy start to become clear… as do we.”

She said $1.70 “significantly undervalues” Steel & Tube, then turned to practicalities if Fletcher pursued its approach: “The proposed acquisition would need clearance under the Commerce Act, which would take some time to work through due to Fletcher’s vertical presence & significant size in several steel product markets.”

She added: “While the market remains highly competitive, Steel & Tube continues to win new customers, sign large contracts, increase efficiencies & reduce costs.”

Fletcher focuses on short-term comparisons

Fletcher Building concentrated on the short-term comparisons, which showed 35-38% premiums over most recent trading.

Looking further back, Fletcher Building said: “A price of $1.70/share implies a transaction multiple of 12.3x Steel & Tube’s ebit (earnings before interest & tax) guidance for the 2019 financial year. Fletcher Building believes this implied transaction multiple represents compelling value for Steel & Tube shareholders given it is materially above the average trading EV/EBIT multiple over the last 5 years of 9.2x.”

Offer process will continue

Fletcher Building chief executive Ross Taylor.

Fletcher Building chief executive Ross Taylor, who took charge of the company last November, said Fletcher Building preferred to work constructively with Steel & Tube’s board to progress its proposal, and had been in discussions with Steel & Tube & a number of its major shareholders over the last 3 weeks.

“Through this process shareholders, who collectively own more than 20% of all Steel & Tube shares on issue, confirmed their position that the board of Steel & Tube should, in good faith, progress the development of the proposal with Fletcher Building, with a view to it being put to Steel & Tube shareholders.

“Given the strong shareholder support to date, Fletcher Building intends to continue discussions with Steel & Tube shareholders & board, with a view to reaching an acceptable outcome in the immediate future.”

He said the acquisition “is consistent with Fletcher Building’s 5-year strategy announced in June, and fits firmly within its focus on the New Zealand & Australian building products & distribution sectors.

“An acquisition of Steel & Tube is a unique opportunity to create the leading steel distribution business in the New Zealand market. We believe that there is a significant ability to leverage our business model & people across the combined business for the benefit of our customers, employees & shareholders.

“In particular, we believe customers would benefit from an improved service offering & distribution network, broader product range and investment in innovation. We consider there to be potential value creation over time as benefits of the combined operation are realised, providing us with the confidence to present an attractive proposal to Steel & Tube.”

“We believe this is a compelling proposal for Steel & Tube shareholders, representing a significant premium to recent share price trading and broker valuations. If successful, the proposed transaction has the ability to deliver significant value to Steel & Tube shareholders and materially de-risk the turnaround plan that Steel & Tube management are beginning to embark on,” says Mr Taylor.

The proposed transaction would require clearance from the Commerce Commission. Fletcher Building has undertaken a significant amount of work with its economic and legal advisers on combining Fletcher Steel and Steel & Tube.

Fletcher raises nationalism & ‘still competition’ flags

In an argument likely to be needed to convince the Commerce Commission, Mr Taylor said: “Fletcher Building believes that the New Zealand steel industry would remain highly competitive if it acquired Steel & Tube, with a number of well established competitors remaining, in addition to a growing number of offshore suppliers selling directly into the market.

“This work has given Fletcher Building confidence that the transaction would receive the necessary clearance from the Commerce Commission. Approval from the Overseas Investment Office will also be necessary.”

Mr Taylor said – without acknowledging the sharp lift in share price 4 days before Steel & Tube revealed the approach – “discussions with Steel & Tube in relation to the proposal are intended to be progressed confidentially until an agreement can be reached. Until that point, the proposal remains incomplete & is non-binding, and therefore may not result in a transaction occurring. The proposal is not a takeover notice for the purposes of the Takeovers Code. The company will update the market with any material developments as appropriate.”

Earlier Fletcher stories:
22 August 2018: Updated: A loss, but flow of red ink stops at Fletcher Building
1 July 2018: Fletcher Building exits Sims recycling joint venture
22 June 2018: Australia the next big focus for Fletcher, offsite construction an innovation example
14 February 2018: Another $486 million of losses for Fletcher Building, and Norris resigns
21 September 2017: A year on, Fletcher board still has ‘construction nous vacancy’ pencilled in
21 July 2017: Fletcher Building takes axe again to construction earnings, Adamson ousted
20 March 2017: Fletcher Building cuts earnings guidance by $110 million

Earlier Steel & Tube stories:
24 January 2018: Steel & Tube reaffirms guidance based on long list of new positives
13 September 2018: Steel & Tube bookbuild scaled
30 August 2018: Steel & Tube completes books-clearing, future already brighter
7 August 2018: Updated: Steel & Tube seeks $80.9 million from placement & rights issue, updates guidance
23 May 2018: Review puts Steel & Tube ebit loss at $38 million
21 August 2017: Steel & Tube performance dissatisfies new chair

Attribution: Fletcher and Steel & Tube releases.

Updated: A loss, but flow of red ink stops at Fletcher Building

on Wednesday 22 August 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ

Published 22 August 2018, updated with return comparisons:
Fletcher Building Ltd has stemmed the flow of red ink.

After a tumultuous 2 years of losses in the construction section of its Building & Interiors division, the company said today it made a $190 million net loss for the June 2018 year, compared to a $94 million profit in 2017.

The company’s $710 million of operating earnings before significant items, and excluding Building + Interiors (B+I), was at the high end of the $680-$720 million guidance issued when it reported its half-year result in February.

Fletcher Building chief executive Ross Taylor.

Chief executive Ross Taylor said today Fletcher Building had maintained B+I losses at the $660 million announced in February.

Revenue rose 1% to $9.471 billion, which Mr Taylor said was driven by a solid sales performance across core businesses in New Zealand & Australia, offset by a reduction in construction revenues.

Cashflow from operations rose $153 million to $396 million, reflecting improved working capital management, offset partly by continued outflows on the B+I projects.

In New Zealand, Mr Taylor said the Residential & Development division performed strongly, growing revenue & earnings and significantly increasing the volume of units sold to 714 (499 the previous year).

Mr Taylor said raw material & supply chain cost pressures offset revenue growth in a number of businesses in the Distribution, Building Products, Concrete & Steel divisions.

In Construction, outside B+I, revenue & earnings growth remained strong in Higgins, while the Infrastructure and South Pacific businesses experienced declines due to the roll-off of a number of major projects.

Gross revenue increased in Australia, where all businesses achieved positive sales growth on a $NZ basis. Mr Taylor said performance improvements gathered momentum at Iplex Australia & Tradelink. “Despite this, operating earnings before significant items decreased, as the majority of businesses were impacted by increased input costs, particularly in energy & resins.”

Internationally, difficult trading conditions in a number of Roof Tile Group export markets offset a positive performance by Formica in North America & Asia.

In summary, Mr Taylor said: “We have seen volume & revenue growth across a number of our New Zealand & Australian businesses, but these gains have been more than offset by increased costs and our need to invest ahead of plan to meet higher than anticipated market demand.

“With a new strategy in place, we have started the new financial year with clear priorities & an operating model that will support us to deliver against them. Our focus in the 2019 financial year will be on growing our core businesses, continuing to stabilise our construction division and completing the divestment of non-core businesses Formica & Roof Tile Group.

“In both New Zealand & Australia we expect activity in the residential sectors to decline slightly, while activity in the non-residential, commercial & infrastructure sectors is likely to increase. In Australia this will be most pronounced on the eastern seaboard, which is expected to benefit from large state- & federal-funded projects in rail, road & pipelines.”

Significant items for FY18 included a charge of $168 million, which comprised group restructuring charges of $91 million & impairment charges of $114 million, offset by gains on divestments of $37 million. Mr Taylor said the restructuring costs & business divestments were as a result of the implementation of the new group strategy announced on 21 June.

In line with the company’s dividend policy to pay dividends in the range of 50-75% of net earnings before significant items, no final dividend was declared in the 2018 financial year. Mr Taylor said the company expected, to be in a position to resume dividends in the 2019 year, subject to satisfactory trading performance.

The company will issue its 2019 earnings guidance at its annual meeting.

Key results (2017 results in brackets):

Total revenue, up 1% to $9.471 billion ($9.399 billion)
Operating earnings before significant items, down 90% to $50 million ($525 million)
Building + Interiors, loss of $660 million ($292 million loss)
Operating earnings (excluding B+I) before significant items, down 13% to $710 million ($817 million)
Significant items, 33% improvement to $168 million loss ($252 million loss)
Operating earnings (ebit – earnings before interest & tax), $118 million loss ($273 million profit)
Pretax earnings, $275 million loss ($162 million profit)
Net earnings, $190 million loss ($94 million profit)
Basic earnings/share, 25.5c loss (13.5c profit)
Dividends declared, zero (39c/share)

Links:
Media Release
Management commentary
Results presentation
2018 Annual Report

Earlier stories:
1 July 2018: Fletcher Building exits Sims recycling joint venture
22 June 2018: Hassall to chair Fletcher Building, 4 new directors named
22 June 2018: Australia the next big focus for Fletcher, offsite construction an innovation example
21 June 2018: Fletcher Building strategy amounts to a spring clean – board announcement tomorrow
20 April 2018: Institutional bookbuild puts $1.35 premium on Fletcher shares
18 April 2018: Big Fletcher fundraiser plus divestments intended to stabilise construction’s fallen giant
4 April 2018: Lenders give Fletcher Building 2-month waiver extension
2 March 2018: Fletcher gets US waiver, still negotiating funding terms
21 February 2018: Fletcher half-year loss $322 million
14 February 2018: Another $486 million of losses for Fletcher Building, and Norris resigns
8 February 2018: Fletcher Building warns of worse to come
19 January 2018: Regulator clears Fletcher Building of continuous disclosure breach
27 October 2017: Sheppard turns Fletcher meeting into “absolution or exorcism” exercise
25 October 2017: Fletcher issues guidance, names new chief executive
21 September 2017: A year on, Fletcher board still has ‘construction nous vacancy’ pencilled in
17 August 2017: ‘Fessed up, time to move on, says an unconvincing Fletcher boss
21 July 2017: Fletcher Building takes axe again to construction earnings, Adamson ousted
20 March 2017: Fletcher Building cuts earnings guidance by $110 million
19 March 2017: Fletcher Building to explain construction loss Monday morning
22 February 2017: Fletcher Building net up 2% after site closures

Attribution: Company release.

Fletcher Building exits Sims recycling joint venture

on Sunday 1 July 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ

Fletcher Building Ltd has reached agreement to sell its 50% stake in the Sims Pacific Metals Ltd recycling joint venture to Sims Metal Management Ltd of Australia for $42 million.

The purchase price is subject to a working capital adjustment which will be finalised post-acquisition. Based on current estimates, Fletcher Building expects total proceeds of the divestment to be between $55-60 million.

Fletcher Building subsidiary Fletcher Steel Ltd & Sims Metals Management established Sims Pacific Metals in 1992 as a 50/50 joint venture.

It’s New Zealand’s largest metal recycling company, operating 9 sites around the country converting scrap metal products into recyclable materials.

In line with Fletcher Building’s strategy to divest non-core businesses, the company decided to exit the joint venture and focus its steel division operations on its manufacturing & distribution activities.

When Carter Holt Harvey Ltd bought Elders Resources NZFP Ltd from Australian mining company North Ltd in 1989, it divested Elders’ non-forestry businesses, including Sims. Sims relisted on the ASX at the end of 1991, shortly before the deal was struck with Carter competitor Fletcher, which had its own smaller subsidiary, Pacific Steel Ltd.

Fletcher sold Pacific Steel in 2015 to BlueScope Steel Ltd, formerly part of the BHP group.

Attribution: Fletcher Building release, Sims Metals, Pacific Steel.

Hassall to chair Fletcher Building, 4 new directors named

on Friday 22 June 2018 in Fletcher Building, Gainz, On the move, Sectors, Securities – NZ

Fletcher Building Ltd will have a new chair & 4 new directors on 1 September. 2 directors will retire.

Sir Ralph Norris will step down as chair, replaced by Bruce Hassall (pictured at right), who was appointed as an independent director on 1 March 2017.

The 4 new directors, all independent, are Barbara Chapman, Robert McDonald, Doug McKay & Cathy Quinn. The company also intends to appoint an extra Australian director.

2 directors will retire – Alan Jackson by rotation at the annual meeting, after 9 years, and Cecilia Tarrant on 1 September, after 7 years, to allow an additional director to be appointed to the board as it oversees the implementation of the new Fletcher Building strategy.

Sir Ralph said the appointments would strengthen the board’s expertise & diversity.

Expertise is an important factor, because it was the lack of board expertise in the construction sector that was most notable in the collapse of the company’s vertical construction performance. The company is exiting that part of its business – 4 projects left to complete.

Sir Ralph said today: “While our original intention was to seek a director with construction experience, with our appointment [as chief executive] of Ross Taylor, who has considerable expertise in this area, our decision to exit the vertical construction sector and a new strategy in place, we believe the appointments we have made will best support the company’s new strategic direction.”

Mr Hassall has extensive experience across both public & private sectors. He was chief executive & senior partner at accountancy firm PricewaterhouseCoopers NZ. He will relinquish his role as chair of the audit & risk committee.

The new directors:

Barbara Chapman.

Barbara Chapman, BCom: Ms Chapman retired after 7 years as managing director & chief executive of ASB Bank Ltd, and previously as group executive human resources & group services for the Commonwealth Bank of Australia. Barbara recently joined the boards of Genesis Energy Ltd & NZME Ltd as an independent director.

She began her career with the Commonwealth Bank Group in 1994 and has held senior executive roles responsible for marketing, communications, human resources, retail banking & executive leadership in New Zealand & Australia.

She has also chaired Oxfam NZ and been a director of Oxfam International, was an inaugural trustee of the NZ Equal Employment Opportunities Trust and chaired it for several years and is an inaugural member of the “25 Percent Group”, which aims to increase diversity at senior management levels & within New Zealand boardrooms.

Rob McDonald.

Rob McDonald, BCom, FCA: Mr McDonald retired as Air NZ Ltd’s chief financial officer at the end of 2017 after 24 years with the airline. He was appointed group financial planning manager in 1993, group treasurer in 1995 and chief financial officer in 2004.

He’s an independent director of Contact Energy Ltd and will take over the chair there on 1 September. He’s a director of Chartered Accountants of Australia & NZ and will chair Fletcher Building’s audit & risk committee.

Doug McKay.

Doug McKay, BA, ONZM, CMinstD: Mr McKay was the first chief executive of the new Auckland Council in 2010, on a fixed term until 2012. Before that, he had an extensive background in leading large organisations in both New Zealand & Australia, including senior roles at Carter Holt Harvey Ltd, Lion Nathan Ltd & Goodman Fielder Ltd, and as chief executive at Sealord and chief executive & executive chairman of Independent Liquor (NZ) Ltd. He chairs the Bank of NZ & Eden Park Trust and is an independent director of

Cathy Quinn.

Genesis Energy Ltd, IAG NZ Ltd & the National Australia Bank.

Cathy Quinn, LLB, ONZM: Ms Quinn is a commercial & corporate lawyer. She leads the mergers & acquisitions and private equity teams and the China practice at Minter Ellison Rudd Watts, and has chaired the firm for 8 years. She’s a director of Tourism Holdings Ltd and a board member of the NZ Treasury & the NZ China Council.

Progress pleases Norris

Sir Ralph Norris presenting the annual result last August.

Commenting on the appointments, Sir Ralph Norris said: “When I announced that I would step down as chairman in February I committed to first completing the chief executive transition & board refresh I had commenced, and I am pleased with the progress that has been made.

“Our chief executive, Ross Taylor, is now firmly established in the role and has led the development of a focused strategy that aims to deliver long-term growth for shareholders. Our balance sheet has been strengthened following a successful capital raising, and the company is on track to deliver 2018 financial guidance.

“Bruce Hassall will bring strong & steady leadership as Fletcher Building’s new chairman, and will complete the board refresh with the appointment of an Australian director in the coming months.

“Our 4 new independent directors are high calibre individuals who bring a mix of commercial, operational & governance expertise, which will greatly enhance the experience & diversity of the board.

Attribution: Company release.

Australia the next big focus for Fletcher, offsite construction an innovation example

on Friday 22 June 2018 in Fletcher Building, Gainz, Sectors, Securities – NZ

Fletcher Building Ltd chief executive Ross Taylor said in a presentation in Sydney yesterday the group intended to grow its Australian business over the next 5 years to be bigger than its New Zealand construction & building products business.

To do so, he expects to take a leaf out of the New Zealand business’s success, the vertical integration & intercompany trading which make up 11% of its business here but only 3% in Australia.

Fletcher Building chief executive Ross Taylor.

Mr Taylor & chief financial officer Bevan McKenzie gave 2 presentations, to media and then to analysts, on the company’s 5-year strategy.

At the end of the first presentation, Mr Taylor said: “We’d expect, 5 years out, Australia to be bigger than New Zealand. You’ve got to say that’s the vision for Fletcher Building. That puts a marker here, that we want to be bigger in Australia.”

In a pre-presentation story on the documents yesterday, I characterised the strategy as spring-cleaning. After one streamed presentation and going through the similar documentation presented to analysts, that remains a reasonable view of it.

Some of the “strategy” amounts to exhortation to do better, as in this from Mr Taylor: “25% of our businesses have a culture of innovation. We need to drive this to 100% over the next couple of years.”

The company has already announced parts to be sold – Formica and the Roof Tile Group.

Fletcher has stopped seeking new work for its commercial vertical construction business, the exceptionally troubled part of the Building + Interiors division, and will continue to wind it down.

That leaves the strategy focus on getting the remaining New Zealand businesses to perform better, and lifting output in Australia. The starting point is the departure of about 90 staff – either gone or leaving – and the repositioning of the multi-business structure, with new appointments, titles & selection of business segments to command.

From the outside, what do you see in Fletcher Building? If it’s not in your segment of the market but might decide to enter it, you need to be wary of possible outcomes. In New Zealand construction-related business beyond the troubled commercial construction segment, Fletcher is not looking at downsizing.

At one point, Mr Taylor said Fletcher would assess “everything we do through a customer lens” [versus the control temperament which has driven the Fletcher business model for decades]. But mostly the presentations were about clarifying business portfolios and driving the businesses within them harder.

How the strategy looks

Below are excerpts from the presentations, with some explanatory comment.

Any portfolio decisions need to position us to take advantage of key macro trends:

Product innovation:

Green & efficient buildings: regulation & changing consumer preferences drive innovation in energy efficiency
Moving into an era of advanced functional materials & more resilient systems

Service & channel innovation:

Personalised service expectations are growing. Customers interact with a brand (not a channel) and expect the same experience no matter what channel
Incumbents & new low-cost entrants offering digital services & online purchasing to end consumers

Labour productivity:

Pre-assembled structures reduce the need for onsite labour and speed up construction times
Value shift in favour of larger manufacturing entities able to invest in offsite production facilities

Global supply chains:

Low cost country (LCC) sourcing for inputs continues to present large cost reduction opportunities
Globalisation of competition from LCC producers & Western players threaten share & margin erosion

Continuing to manage multiple platforms across multiple geographies from a capital & capability perspective was likely to be challenging. Therefore we have decided to focus the business.

Our starting point: a portfolio made complex through lack of a clear strategy.

With Fletcher Building at only 15% of the overall NZ market & 1% of Australia in residential, non-residential and infrastructure & other, there are ample opportunities to grow share and pursue new “adjacencies”.

Adjacencies? What Mr Taylor presented was a chart (below) showing market segments where Fletcher Building has a presence, and those where it doesn’t – and therefore might expand.

“Our first priority will be to refocus on our core, and actively defend and grow NZ Building Products & Distribution.

“In New Zealand, we will continue to leverage businesses that are complementary to our core and strong performers in their own right. Golden Bay Cement-Winstone is a strong performer. The core adds value by generating pull-through. Residential & Development is a strong performer that adds value to the core by generating pull-through and driving innovation (eg, panelisation). In Construction, we have strong market positions and generate pull-through, but we have to get it performing.”

The decision to exit market sectors

“Finally, we had a choice to make. We had 2 legitimate plays relative to the core, but we couldn’t do both given constraints around capital & capability.”

Option 1: Turn around & grow Australia as a natural extension to the Fletcher Building core
Option 2: Drive Formica to full potential with focus & capital
The decision: Australia is the preferred growth platform.

Intercompany sales

An important factor was a comparison between the opportunity to drive sales between Fletcher companies. At Formica the opportunity was minimal, whereas in Australia it was high. Compared to intercompany sales in New Zealand – $660 million, 11% of total sales of $6.2 billion – Australian intercompany sales last year were worth only $80 million, or 3% of $3.1 billion total sales.

From there, the vision, and that is “to be the undisputed leader in NZ & Australian building solutions – with Products & Distribution at our core”. Under that heading, Mr Taylor pointed to “where to play” and then to “how to win”.

Where to play:

Refocus on the core:

Defend & grow NZ Building Products & Distribution
Leverage complementary positions in Concrete & Residential

Stabilise Construction:

Close out B+I within provisions
Grow infrastructure & roading businesses

Strengthen Australia:

Achieve a successful turnaround
Replicate select NZ positions in Australia

Exit non-core businesses:

Divest Formica & Roof Tile Group

From there, Mr Taylor said the next step was “how to win”, which came with 5 bullet points:

A simpler & leaner, decentralised operating model
Innovating to achieve continuous improvement and take advantage of key macro trends
Disciplined performance improvements in safety, sustainability, procurement & operations
Growth capex focused on strategically important, high returning business units
Adding infills & adjacencies.

He said Fletcher Building saw 3 broad stages to advance those intents over the next 3 years (June balance dates):

2019: stabilising – turnaround or exit
2020: solid performance
2021: growth

Cutting central control

One key element of these changes is to reduce “an overweight central overhead” – that “overhead” will be moved closer to the front line for an annualised cost saving estimated at $30 million, expressed this way: “Moving front line-focused activity back to the divisions & business units to better serve our customers, control risks & grab opportunities”.

Mr Taylor said: “25% of our businesses have a culture of innovation. We need to drive this to 100% over the next couple of years.”

Existing examples of innovation include:

Laminate exterior cladding
Mobile PVC manufacturing
Gypsum-based rigid air barriers
Benchtop, roofing & façade integrated photovoltaics
Lightweight flooring systems
Self-cleaning steel roof panels
3D concrete printing

Offsite construction impetus

“Panelisation” – more factory completion of buildings or building components – fell under the heading of labour productivity rather than innovation. Mr Taylor said the company had completed 2 successful prototypes, had tested modularised vertical construction and was looking for a factory site in Auckland. He expected it would cost $15-20 million to build.

“We’ve trialled panels on a number of houses. Of the 1000 houses we’re doing, we’ve got 300-350 houses/year we can panel – you can’t do it on every house. We’re testing it on our own houses. Over the next 12 months it will be operating fully.

“You get savings when you get scale of throughput and you drop it [the house construction timeframe] from 22 weeks to 9.”

The big projects

On the group’s lossmaking issues with vertical, large commercial construction, chief financial officer Bevan McKenzie said confidentiality agreements meant it wasn’t for Fletcher to make announcements. However, he said the Building + Interiors division had completed 7 of 16 projects it had underway when the company revealed the division’s exponential lossmaking last year, 5 more would be completed this year and 4 would be completed in 2019, including the major pair in Auckland, SkyCity Entertainment Ltd’s NZ International Convention Centre and Precinct Properties NZ Ltd’s Commercial Bay redevelopment of the old Downtown Shopping Centre.

Link:
21 June 2018, Fletcher Building strategy presentation slides

Earlier stories:
21 June 2018: Fletcher Building strategy amounts to a spring clean – board announcement tomorrow
20 April 2018: Institutional bookbuild puts $1.35 premium on Fletcher shares
18 April 2018: Big Fletcher fundraiser plus divestments intended to stabilise construction’s fallen giant
4 April 2018: Lenders give Fletcher Building 2-month waiver extension
2 March 2018: Fletcher gets US waiver, still negotiating funding terms
21 February 2018: Fletcher half-year loss $322 million
14 February 2018: Another $486 million of losses for Fletcher Building, and Norris resigns
8 February 2018: Fletcher Building warns of worse to come
19 January 2018: Regulator clears Fletcher Building of continuous disclosure breach
27 October 2017: Sheppard turns Fletcher meeting into “absolution or exorcism” exercise
25 October 2017: Fletcher issues guidance, names new chief executive
21 September 2017: A year on, Fletcher board still has ‘construction nous vacancy’ pencilled in
17 August 2017: ‘Fessed up, time to move on, says an unconvincing Fletcher boss
21 July 2017: Fletcher Building takes axe again to construction earnings, Adamson ousted
20 March 2017: Fletcher Building cuts earnings guidance by $110 million
19 March 2017: Fletcher Building to explain construction loss Monday morning
22 February 2017: Fletcher Building net up 2% after site closures

Attribution: Company presentation, live stream.

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