Except for glass.. metro glass sell $250m of the stuff and only make a few bucks out of it. Consumers getting a great deal on glass!
I bet not even the savvy German consumers would be getting better deals on glass back in the fatherland
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BP, not really. We have Master builders guarantee so really all homes should be to a standard. The fact there are some builders who won't sign in for it shows a weakness. I have just seen a home friends were getting reno'd and builder totally FUBAR'd it. They have to get a new builder to fix it. No they weren't part of the MB association so they are likely up for costs pending a court case.
Also we are only a nation of 5 million. So we are very small and isolated and we pay international prices for commodities.
Rawz, In Europe the PVC Window is huge. In NZ its just started to gain traction. Big problem not many colours available and NZers love there colours. Sizing can also be a problem and lead times of 6 months.
Also the Glass association here has recently told industry that we should be triple glazing here. Selling point Warm housing. This will add a huge cost to houses as it will require new Aluminium to be designed to compliment this.
Also Metros biggest problem is Management are arrogant because of there so called dominance. They failed to execute in Aust and lost major client so now have a book of excuses to tell shareholders.
To be honest ... while I knew enough about price and quality of timber and whatever you need to connect timber with each other to be able to compare ... I never had a lot to do with glass - i.e. I don't know, you may or may not be correct re glass prices in NZ.
What I can give you however is the fact that a complete tripple glass window (i.e. glass, frame, hinges, lock) in
Germany is cheaper that a double glassed window (comparable size) here in NZ.
I suspect that the low earnings of MPG have more to do with the Kiwis love to produce every window of every house (o.k. - I am exaggerating a bit, but not much) in a different size and building them form the scratch instead of using standardized prefabricated windows.
While MPG tried to optimise their factories to produce uniquely sized glass sheets .... the result for the customer will still be more expensive than buying complete standardised windows in some other part of the world.
But anyway this is the FBU thread ...
Everything is more expensive in NZ - size of the market (which means short runs & less economies of scale) and distance from supply (and demand) markets.
Not only do MPG seem to build every window to a different size, they also employ a large number of people that don't seem to be able to use a tape measure which results in an awful lot of wastage and re-work (at least that is my recent experience building a house)
Share price been drifting down everyday lately and FBU making the most of SP drop buying another 70k shares on NZX and 145k ASX shares yesterday. https://announcements.nzx.com/detail/383631
SP down again today, are we expecting bad news?
Disc: FBU and I are both buying at these levels
Fbu should do well next five years.
This report says 265,000 new dwellings next 5 years ….construction sector value to double in 5 years ….wow
https://www.rnz.co.nz/news/political...rs-mbie-report
And now officially into retirement villages https://www.nzherald.co.nz/business/...PLPMB7B4ZBTUE/
Different model, more in line with FBU's standard construction offerings. Designed to appeal to the more 'affordable' end of the market with pretty much no onsite amenities. But with some care services able to be accessed through a third party. Will suit some, for sure, and open a new sector in the market.
Comparative profitability still to be seen.
Will be very interesting to see what this looks like. More affordable for those who can't afford the big players, but I am not sure about the lack of amenities. Potential customers may be fine without a gym or swimming pool, but a hairdresser onsite once a week would be a basic expectation these days. The capital gain share will definitely be a pro for families looking for somewhere for Mum or Dad. Especially given there is to be no rest home - Mum and Dad will have to move elsewhere when they need that.
[QUOTE=BlackPeter;930410]But didn't FBU had plenty of problems (and lost plenty of money) during the last building boom? From memory ... they don't deal well with too much work :):
Hey BP. The company is run a better and tighter these days. Taylor is very clear on expectations he has on respective business units.
Wow thats 1019 houses a 7 day week, 52 weeks a year, Good luck with that i say
The annual number of new homes consented in the year ended January 2021 was 39,881, up 5.8 percent from the year ended January 2020, Stats NZ said today. The all-time high for any 12-month period was 40,025 in the year ended February 1974, which is 144 more than the current year-ended figure.2/03/2021
Fair enough - though not familiar with the unit "money year". Is this more or less than a "light year"?
Anyway - I can't remember - did FBU contribute to the leaky building crisis? I bet they did.
Great strategy then to make money with correcting their own mistakes. Need to buy more FBU, they screwed up a lot over time - unlimited potential for making money!
Ross Taylor (ceo) has construction experience rather than being a finance guy which is good.
Hmm another fire at Convention Centre. Thankfully this time not too much damage.https://www.stuff.co.nz/auckland/300...vention-centre
Jarden reckon Fletchers doing well and increased FY forecast
I liked this bit …a long earnings upgrade cycle is likely
Current target price $7.36
NZ housing consent records broken, nearing 50,000 mark - Stats NZ
https://www.nzherald.co.nz/business/...2N43M6W4KVKXA/
That is huge. I wonder how 50,000 apartments compares value-wise to a lower number say 20,000 standalone mcmansions. As an aside, house prices are out of whack with replacement cost. Some old 70s flats on single title with block and asbestos cladding which we used to own, were on the market recently. The asking price (with a 5 percent yield) after deducting improvements, worked out to $6000 per sqm of land value. Located in Hamilton. :) Am not sure even Kpg sold their 3 hectare sylvia park block anywhere near that much. If buyers want to pay it, it is their choice.
James Hardie announced a boomer profit this morning
ANZ the starvregiob ."….No specific dollars mentioned but NZ seems to have really well …..including decent margin expansion
Fletchers will doing well …how well we’ll know soon
Thanks for that Winner. 16 Th Feb "D Day". I am expecting similar to last years first half bearing in mind 10 week shut down.
I’ve got FBU in the 2022 comp and have recently increased my holding. FBU and STU to have cracking results
FBU share price dropping and hit 12 month low today of $6.28, good buying or punters not optimistic of HY results next week?
Disc: holding and bought more today
For Barrs preview ahead of HY 16/02
OUTPERFORM
Fletcher Building (FBU) will report its 1H22 result on Wednesday, 16 February. Despite a lockdown, we expect FBU had a strong first half underpinned by robust demand. Whilst FBU will have incurred some costs from plant shutdowns we expect EBIT to be +5% with strong contributions from Building Products and Steel. Outlook statements are likely to include an Omicron caveat. We believe recent share price weakness reflects concerns around a slowing housing market. However, given the pipeline of work to be done, demand for materials is likely to remain robust for a prolonged period. With FBU trading on a 12-month forward P/E of 11.5x we reiterate our OUTPERFORM rating.
link
NZX Code FBU
Share price NZ$6.45
Target price NZ$8.20
Risk rating Medium
Issued shares 816.6m
Market cap NZ$5,267m
Avg daily turnover 1,014k (NZ$7,274k)
link
Financials: Jun/ 21A 22E 23E 24E
NPAT* (NZ$m) 413.0 415.3 461.2 499.7
EPS* (NZc) 50.3 50.9 59.1 64.0
EPS growth* (%) n/a 1.0 16.1 8.4
DPS (NZc) 30.0 32.0 38.0 42.0
Imputation (%) 0 59 53 52
*Based on normalised profits
link
Valuation (x) 21A 22E 23E 24E
PE 12.8 12.7 10.9 10.1
EV/EBIT 10.6 10.4 9.9 9.1
EV/EBITDA 6.9 6.7 6.5 6.1
Price / NTA 2.0 2.0 1.9 1.8
Cash div yld (%) 4.7 5.0 5.9 6.5
Gross div yld (%) 4.7 6.1 7.1 7.8
Key things to look for in 1H22 result:
Robust NZ core demand: We expect FBU will have experienced pockets of strength in key businesses such as steel, plasterboard and insulation. FBU's domestic production has likely won share from importers given supply chain issues.
Australia turning around slowly: We saw some half-on-half benefit from significant Australian restructuring in FY21 and we expect to see continued improvement in 1H22 underpinned by a robust demand backdrop.
Cost pressure: FBU is likely facing a number of inflationary cost pressures. However, given domestic manufacturing and the strong demand backdrop we believe this is largely being offset with price and share gains from lower import competition.
FY22 guidance: Due to COVID-19 uncertainty FBU is yet to prove any quantitative FY22 earnings guidance. In line with prior years, we expect guidance to be provided although the range may be wider than normal given the Omicron uncertainty in NZ. FBU's current trading and outlook comments will be of key interest to the market given the slowing NZ housing market.
- .
Looks like FB getting some cheap land....paid $265k for land they put 10 homes on!!
Fletcher's cut-price land deal surprises competitors | BusinessDesk
Pretty solid results and outlook with big dividends going forward too ....I think this one is on the way up for 2-3 years ...can be considered a growth at reasonable price stock with BIG dividend yield at current prices .
Outstanding numbers and nice juicy fully imputed divvy of 18c and buy back to continue. A blue chip stock!!!
This along with EBOS, two solid earnings report to kick off the season. A very busy next week with flurry of results to come out..
Solid result. And 2nd half looking "very solid".
I like this part. Very good result given the lock downs..Costs well managed as expected..
New Zealand residential consents were running ahead of industry capacity.
"This has created a backlog of work on top of future consents in the coming years. This is anecdotally supported by our home builder customers generally now placing orders for their customers 12 to 18 months in advance," he said.
As well, the infrastructure sector continued to have a strong growth outlook on the back of committed and planned government projects. Similarly, in Australia, forecasters are all pointing to ongoing strong growth across residential, commercial and infrastructure through FY23 and beyond, Taylor said.
Question re expectations of full year divvy from Grant (Jarden), Ross's reply think positively in line with outlook. Could be another 18c-20c me thinks.
In case you don't know who he is, then Home - Mark Adamson (markadamsonceo.com)
nice result.. quiet day on the markets need results like this to steady the great ship of NZ business.
Up 7% today …good start for the recovery back to 8 bucks
I can't get excited about cyclical companies where truck loads of executives are paid fabulously well for mediocre skills.
How thrilled should we be with today's result and share price considering the shares were over $10 in 2016 and more than $12 way back in 2007 ?
I suppose this time they will tell you they're going to grow profits on a sustainable basis going forward with new investment in XYZ plant...forgive me being a cynic, but haven't we heard the same things many time's before ?
I suppose the counter argument is every dog has its day but for how many days will this dog bask in the sunshine of the current cyclical tailwinds ?
Its a nice trade .... it always has been.
Usually buy at 6 and sell at 8-9
I agree Beagle however there is value in the SP right now. What Waltzingman says... 9 bucks would be good
one never knows, FBU could put a few good reporting periods together in a row and then next thing you know you find yourself at $10-$12 share.
Happy to hold construction industry related shares right now as well. FBU did note that they were happy with how they were raising prices in line with inflation. Good protection of my dollar owning this stock. STU up next
its a 50/50 call for sure...but so is everything right now except the 10's.
I'm quite surprised how beaten this has been given tailwinds, but as Beagle says maybe the market is very forward looking. I reluctantly sold my holding back in the low/mid 7's to reduce stock exposure (left STU as my main construction horse) and thought I'd regret it, however turned out to be a very good decision!
Technically speaking we have been well oversold (RSI) on both the weekly and daily charts. Daily also had diverging RSI. I took a position for this bounce and will sell a small portion once this daily bounce tops out, putting a stoploss below the lows and meaning I will be risk free on the trade. Positioning like this makes it very easy to just let the trade play out when you are looking for a longer term bottom (i.e. on the monthly chart).
8.80 looks like its the next high if they keep it hammering along...but MR B is right.. It has to stop here and start moving up.
out of the blocks and running.. up...
On the way to clinch $7 crown....
powering up ... nice to see...
Building consents still heading up .....plenty of materials needs and work over the next few years for Fletchers
i've also been buying more RTM. Reasons: FBU still buying back shares, management buying on market, fully imputed divvy of 18c shortly, great HY result and positive forecast, sector tailwinds. I'm surprised that its not back over $7 so good buying imo.
https://announcements.nzx.com/detail/388325
Go Ross - you tell those ComCom guys they wasting their time on this wild premise that the likes of Fletchers are rogues
Jeez - they only have an EBIT margin of 8% .....about 5% after tax return .... real rogues eh
https://www.nzherald.co.nz/business/...YSLQTOKJ5XQNQ/
Agree it is time for FBU to shine. New cycle. No where near the top.
David Clarke is one of the most incompetent Govt ministers on show. Taylor is right about building components for a house. Govt fails to look at the big picture again only choosing to look at part of the picture as per usual. No wonder the Govt has failed in 4.5 years at the helm
FBU keeps moving down Winner() ...
commerce commission investigations completed on
petrol
supermarkets
next on the list building products i believe
fbu be packing there pants now . :scared:
my prediction timber after the div
And where has it got them?
Petrol nothing. Govt should look at how much excise tax there is in the price.
Supermarkets = Nothing. Yawn more dribble
Construction = Nothing but more dribble. As mentioned earlier they are not looking at the total building costs just parts they want to look at.
My takes on Fletcher's (FBU):
Interim Accounts to 31 December, 2021
https://recastinvestor.substack.com/...tcher-building
and
Annual Accounts to 30 June, 2021
https://recastinvestor.substack.com/...tcher-building
Feedback welcome.
Just completing Steel & Tube funnily enough. Should be up today or tomorrow. Cheers.
Housing consents smash 48-year record
https://www.interest.co.nz/property/...-year-february
Thanks Winner, no real surprise and there is still so much new house build demand in system. Shareprice way over sold.
Craigs continues to be optimistic about FBU in their latest report, but the market is not showing much love.
Talked to a fundie who has exited their FBU position:
FBU’s biggest earner is its residential housing division. The company has been enjoying huge windfall profits from its land bank and ever escalating house prices. Division will continue to be profitable but will be hard pressed to deliver the sort of profits it has in recent years. In fact, the fundie expects the division to report reduced profits from 2023.
In the meantime they continue to buy another piece of land for development.
Ellerslie racecourse $100m+ deal: Fletcher Living to buy 6.2 hectares of land for 370 homes
https://www.nzherald.co.nz/business/...BSUCD3KXC5NPU/
Good on them, great buy. You Aucklanders have any idea on value of the sort of homes around that area that those new homes/apartments could fetch?
Hmm 6.2 ha for 370 homes - this is 167 m2 per section. Take off 10% for common property (like driveways, access roads, ... leaves something like 150 m2 per property. Not really the quarter of an acre dream.
I suppose they want to use the high density rules our beloved government introduced?
Get probably less than the median Auckland house price, but still - if they do it right (not a given with Fletchers) - something like 750 k plus for a 2 to 3 bed room apartment seems realistic? I've seen some selling slightly below under 1 mill - but than obviously location and standard must be right.
Hold your horses. From the Herald:
"Fletcher fast-track plans for $100m+ Ellerslie site opposed by Ōrākei Local Board"
Completely agree that this should not be processed under the COVID-19 Fast Track Resource approval process . Completely inappropriate. Should go through the normal Resource Management process, warts and all, to ensure appropriate checks and balances are applied.
FBU unloved at moment …..share price 604 …probably 5something tomorrow ……lowest price since Feb last year
Maybe the $500,000 the govt giving Winstone to put in a more energy efficient will help out
Does seem weird the government giveth on one hand while ‘accusing’ them of price gouging re plasterboard.
The more they buy back, the cheaper they get……
https://www.stuff.co.nz/national/pol...nd-for-housing
Govt spends $1.4b on 16,000 new homes. More furl on the fire..
Makes sense though to buy more when the sp is down rather than up when doing share buybacks.
Institutions are obviously taking the opportunity of the buyback to lighten up their weighting in the stock.
From a fundamental assessment point of view, there are concerns that the big driver of FBU's turnaround - windfall profits from residential division - is not going to deliver from this year given how residential property prices are falling out there. Other divisions will continue to do well but FBU makes super profits from its residential construction division.
https://www.stuff.co.nz/business/128...biggest-agency
Like this one that fell over - just what we need
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