FBU - Fletcher Building

[Paint it Black]

Western Australia Plumbing Issues Update 13 October 2023

https://fletcherbuilding.com/assets/5-news/pdfs/WA-Plumbing-Issues-Update-Presentation.pdf

FBU said in October that evidence points to installation as the reason leaks are occurring in some houses in Perth, and that installation practices have deteriorated over time.

The plumbing failures are specifically occurring in Perth and Western Australia, not in other parts of Australia or internationally. The issue appears to be isolated to homes built in WA using Iplex Australia's Pro-fit pipe product.
The issues are not present on the East Coast of Australia or in other geographies where similar products are used.
Approximately 35% of relevant WA homes are expected to experience one or more leaks over time.

Seems like FBU have decided $150 million is the price needed to get a deal together and move on. Their main worry was a product recall which has been mitigated but it still looks open ended with the main builder not yet committing and the WA government extending the liability period to 15 years. Obviously they have got the best legal advice and the market likes it but lots of unanswered questions as to why is this happening in just WA and why not cap it as the WA government have done with their 20% contribution?

[Balance]

Seems like FBU have decided $150 million is the price needed to get a deal together and move on. Their main worry was a product recall which has been mitigated but it still looks open ended with the main builder not yet committing and the WA government extending the liability period to 15 years. Obviously they have got the best legal advice and the market likes it but lots of unanswered questions as to why is this happening in just WA and why not cap it as the WA government have done with their 20% contribution?

Like the NZICC, this open-ended negotiated liability has the potential to bleed FBU for years and years to come. Note that the WA government contribution is capped at $20m but FBU's is unlimited?

[troyvdh]

Historically NZ inc has/had the highest priced residential housing market in the world.
Am I wrong.
I understand that in the US a 4/2 piece of timber is at least 70 % cheaper than in NZ.

And white ware is probably 50 % cheaper.

This plumbing issue ...FGS....thats what happens when companies decide to go deride abuse their customers in favor of their egos and bonuses...