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

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news