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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news