The company has withdrawn guidance for FY20 and cancelled the interim dividend to preserve liquidity.
UBS notes the vast majority of the company’s operations are not considered essential services in New Zealand and will cease trading for at least the initial four-week shutdown.
The broker understands that Fletcher Building intends to reduce salaries by -20% during the initial level 4 period of the four weeks. Liquidity stress is not expected, if GDP recovers sharply in the fourth quarter in line with the broker’s estimates.
Neutral maintained. Target is reduced to NZ$3.90 from NZ$5.05.
Current Price is $3.26. Target price not assessed.