Norris Walks As Fletcher Building Losses Balloon

Not even former bankers are exempt from overseeing a mess, especially when it is a debacle that has created close to $NZ1 billion in losses in less than a year! Take Sir Ralph Norris, a former CEO of the Commonwealth Bank. He retired from the CBA (to make way for another Kiwi in Ian Narev) in 2011 and took up various board roles, one of which saw him made chair of Fletcher Building – one of the biggest building products and construction groups in Australasia.

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Fletcher Building Halts Ahead Of Meeting

A big annual meeting in Auckland this morning (starts around 8.30am Eastern Australian Summer Time) for Fletcher Building with no only the much anticipated earnings guidance for 2017-18 expected, but an explanation for the sharp slide in profit in the year to June and why the CEO Mark Adamson had to go and the name of his replacement expected.

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FBU – UBS rates the stock as Buy

The NZ govt has lifted its construction growth forecasts by 17-24% over 2019-21. The broker had assumed peak activity fro Fletcher in F18 and flat in FY19 before declining in FY20.

If the market becomes comfortable with the govt forecasts, earnings upgrades should follow for Fletcher beyond FY18, the broker suggests. Buy and NZ$8.90 target retained.

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