New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.</li><li>The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).</li><li>Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. </li></ul>

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. 

Building Sector - Ready-Mix Concrete — Set in Its Way

<ul><li>Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38% below the February 2022 peak.</li><li>The decline was largely in higher density dwellings, which have seen some significant falls over recent months (Figure 17).</li><li>With H1 building code changes having pulled forward a number of consent applications, we expect residential consents to decline further over the balance of the year. </li></ul>

Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38% below the February 2022 peak.The decline was largely in higher density dwellings, which have seen some significant falls over recent months (Figure 17).With H1 building code changes having pulled forward a number of consent applications, we expect residential consents to decline further over the balance of the year. 

Building Sector  - NZ Consents — Continued Declines

Equity Bottom-Up

<ul><li>Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.</li><li>NZ materials demand has softened more than expected but Australian margin gains made in 2H23 are holding, and the volume of homes sold has remained relatively robust.</li><li>Work out of legacy projects will impact 1H24 cash flow. While project provisions were unchanged, FBU highlighted downside risks from insurance and claims settlements. </li></ul>

Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.NZ materials demand has softened more than expected but Australian margin gains made in 2H23 are holding, and the volume of homes sold has remained relatively robust.Work out of legacy projects will impact 1H24 cash flow. While project provisions were unchanged, FBU highlighted downside risks from insurance and claims settlements. 

Fletcher Building - Mixed 1H24 Trading Update

<ul><li>Fletcher Building (FBU) has presented its side of the Pro-fit leaks story and provided a strong counter argument to BGC's claims that the issues are caused by manufacturing defect.</li><li>We found FBU's presentation to be comprehensive, highlighting the thorough and detailed investigation that it had been undertaking.</li><li>This included a significant number of product tests, some of which were directly testing key parts of BGC's thesis.</li></ul>

Fletcher Building (FBU) has presented its side of the Pro-fit leaks story and provided a strong counter argument to BGC's claims that the issues are caused by manufacturing defect.We found FBU's presentation to be comprehensive, highlighting the thorough and detailed investigation that it had been undertaking.This included a significant number of product tests, some of which were directly testing key parts of BGC's thesis.

<ul><li>Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue.</li><li>BGC’s investigation has concluded that manufacturing issues are responsible for leaking pipes in the state and BGC believes it warrants a product recall.</li><li>FBU is in trading halt while it formulates a response. We found BGC's presentation to be credible and believe FBU should take the results seriously.</li></ul>

Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue.BGC’s investigation has concluded that manufacturing issues are responsible for leaking pipes in the state and BGC believes it warrants a product recall.FBU is in trading halt while it formulates a response. We found BGC's presentation to be credible and believe FBU should take the results seriously.

New Zealand

Fletcher Building Limited manufactures, distributes, and sells materials for the building industry including wood fiber-based products, cement and aggregates, plasterboard, laminates, lumber, and aluminium extrusion. The Company operates primarily in New Zealand and Australia.

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Fletcher Building (FBU NZ)

Building Sector - Ready-Mix Concrete — Set in Its Way

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior...

Forsyth Barr

Building Sector - NZ Consents — Continued Declines

Residential consents continued their downward trajectory in September, falling to 33.4k (seasonally adjusted and annualised), and are now -38%...

Forsyth Barr

Fletcher Building - Mixed 1H24 Trading Update

Fletcher Building (FBU) provided a trading update at its Annual Shareholder Meeting which highlighted a mixed operating environment.

Forsyth Barr

Fletcher Building - Ross Returns Serve

Fletcher Building (FBU) has presented its side of the Pro-fit leaks story and provided a strong counter argument to BGC's claims that the issues...

Forsyth Barr

Fletcher Building - Pro-Fit Leaks?

Western Australian (WA) homebuilder BGC has fired the first salvo in Fletcher Building’s (FBU) Iplex Pro-fit Pipes issue. BGC’s investigation has...

Forsyth Barr

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