FBU - Fletcher Building

[Balance]

I reckon best action would be to flick off a couple of the low performing businesses, pay down some debt, create spin-off listings for maybe civil & concrete; & create a bit of shareholder value (I remember an article a year or two ago citing that the sum of the parts worth way more than the whole) - then manage the smaller leftover business which would be easier for them to control.

Nothing left to sell.

CR on the cards and it is going to be a very painful one - $750m 1:2 rights issue at $2.00?

[Rawz]

Nothing left to sell.

CR on the cards and it is going to be a very painful one - $750m 1:2 rights issue at $2.00?

that would be brutal if that happened

[Balance]

that would be brutal if that happened

A smart incoming CEO would want that out of the way before coming in to clean the mess.

[winner69]

that would be brutal if that happened

Alan gray man doesn’t want capital raise …generate more cash from operations and cut back on divies the way to go he says

[Rawz]

Alan gray man doesn’t want capital raise …generate more cash from operations and cut back on divies the way to go he says

Poor ole Mr Gray. KMD and FBU killing him.

This from Morning star:

Event analysis

Fletcher Building: We Are Placing Under Review as We Revisit Our Outlook
We place no-moat Fletcher Building under review with yet another disappointing trading downgrade, as we assess what this means for our future assumptions and, ultimately, our fair value estimate.

The firm's balance sheet health looks under some pressure given the New Zealand Convention Centre fire saga and lower earnings over fiscal 2024. Fletcher expects a net debt of about NZD 2 billion at the end of June 2024. As such, we estimate net debt/EBITDA of about 2.2 times at the end of June 2024, exceeding the firm's target of 2.0 times. Fletcher's covenant is 3.25 times senior net debt/EBITDA, and we estimate this to be above 2.50 times at the end of June 2024. A near-term equity raise is possible, and we need to assess the likelihood of it occurring and its materiality should it eventuate. A sale of the Australian Tradelink plumbing business looks increasingly important to assist in deleveraging. We plan to more closely examine the likelihood of a sale and its potential proceeds, given the increased importance of a sale in light of the most recent downgrade.

Fletcher has downgraded earnings guidance to an estimated 13% decline in adjusted EBIT at the midpoint due to lower sales volumes and prices across most businesses, including concrete, building products, distribution, and Australia. The firm is mainly exposed to residential construction. New house starts were 25% and 12% lower in the year to March 2024, compared with the prior year in New Zealand and Australia, respectively.

[Joshuatree]

Is Tradelink even sellable? I understand its also been a dog with incumbent REECE REH mkt cap re $17.4 billion thrashing trade link in all metrics.

[bull....]

FBU Downgraded yest by

citi
jefferies
morgan stanley
macquarie
goldman sach's

all downgrades between 10 - 31% with lowest of 2.56 NZ

need to watch net debt to ebitda ratio for bank pressue i reckon

[Leemsip]

Allan Gray has got a good plan... just hugely underestimated how sh#t KMD, FBU and MPG can be when the chips are down...

[Toddy]

4.8 million shares went through at 2.908 trade .

Serious sellers.

[Greekwatchdog]

4.8 million shares went through at 2.908 trade .

Serious sellers.

You could argue serious buyer(s).