Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fletcher shares surge on improved earnings guidance

Fletcher sees earnings growth of up to 22 percent in 2013, shares gain to 13-month high

By Paul McBeth

Nov. 20 (BusinessDesk) - Fletcher Building, the biggest company on the NZX, expects operating earnings to grow by as much as 22 percent in the 2013 financial year as new home construction accelerates and the firm keeps a lid on costs. The shares rose to $7.65, their highest level since October last year.

The Auckland-based company sees operating earnings of between $560 million and $610 million in the year ending June 30, 2013, chairman Ralph Waters told shareholders at their annual meeting today. That includes a $20 million restructuring cost, and would be between 12 percent and 22 percent higher than the 2012 result. Fletcher restated its 2012 earnings to include a $54 million restructuring cost, which it plans to treat as a normal expense item in the future.

"The board believe that this is achievable, on the basis of the momentum seen in New Zealand recently, which is expected to continue for the whole of the year," Waters said in speech notes published on the NZX.

"Any further deterioration in the Australian market in particular, or in other key markets in which Formica operates, may necessitate a revision to this guidance," he said.

The shares rose 3.7 percent to $7.65, and have rallied 21 percent this year.

Fletcher has rejigged its business and executive team since the recent departure of chief executive Jonathan Ling, restructuring its steel business and expanding its Indian laminates unit.

Waters said New Zealand's residential housing activity has improved, with activity in Canterbury and Auckland leading the way, though work elsewhere has been limited and commercial work remains subdued.

The Australian market is continuing to show a decline in new housing consents, and Waters said the company's doesn't believe lower interest rates will be enough to "significantly improve consumer confidence in the short-term."

New home building in the US has improved, though parts of Europe remain difficult, he said.

Chief executive Mark Adamson told shareholders Fletcher will continue to look at international investment opportunities, particularly in Australia, and is building on measures to remove costs.

He flagged logistics and distribution as an area in need of cost-cutting, which may see shared retail outlets and regional distribution centres, and site closures.

Other ways to reduce costs included the creation of global hubs for procurement, logistics and distribution, manufacturing excellence, digital technologies and business services, and sharing administrative functions such as finance, human resources and IT, Adamson said.

Fletcher will invest in its digital capability to open up new and cheaper communication lines with customers, he said.

(BusinessDesk

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news