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.

Equity Bottom-Up

<ul><li>Volume slowing but forward indicators have picked up​​​​​​​: FY23 volumes declined -5–7% vs. 2H22 levels, led by residential with infrastructure and commercial more stable. </li><li>Margins holding up, for now: Despite lower volumes, margins remain resilient reflecting pricing discipline and cost management.</li><li>Investment continues, free cash flow to follow?: FBU's growth investment is well advanced with NZ$300m spent in FY23 and a further NZ$500m to spend over the next three years (NZ$250m in FY24) which is expected to contribute NZ$120m EBIT at full run-rate from FY27+ (NZ$35m in FY24). </li></ul>

Volume slowing but forward indicators have picked up​​​​​​​: FY23 volumes declined -5–7% vs. 2H22 levels, led by residential with infrastructure and commercial more stable. Margins holding up, for now: Despite lower volumes, margins remain resilient reflecting pricing discipline and cost management.Investment continues, free cash flow to follow?: FBU's growth investment is well advanced with NZ$300m spent in FY23 and a further NZ$500m to spend over the next three years (NZ$250m in FY24) which is expected to contribute NZ$120m EBIT at full run-rate from FY27+ (NZ$35m in FY24). 

Fletcher Building: FY23 Investor Day — Relatively Level

Thematic (Sector/Industry)

<ul><li>Supply shortages and price increases have abated: The prompt for the ComCom's market study was the low availability and rapid price escalation of some building materials seen in late 2021/early 2022.</li><li>Government agrees with most of the ComCom's recommendations: The government has agreed with eight of the nine recommendations from the ComCom to improve competition in the building supply industry.</li><li>No immediate impact on FBU but a key moat will be weakened: Plasterboard was singled out as one market where competition was limited given FBU's dominant 95% market share. </li></ul>

Supply shortages and price increases have abated: The prompt for the ComCom's market study was the low availability and rapid price escalation of some building materials seen in late 2021/early 2022.Government agrees with most of the ComCom's recommendations: The government has agreed with eight of the nine recommendations from the ComCom to improve competition in the building supply industry.No immediate impact on FBU but a key moat will be weakened: Plasterboard was singled out as one market where competition was limited given FBU's dominant 95% market share. 

Building Materials: Govt Agrees With ComCom Recommendations

<ul><li>We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.</li><li>Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855m</li><li>The top end of the range is based on 800 settlements and residential division EBIT of NZ$185m (NZ$136m 2H23 EBIT).</li></ul>

We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855mThe top end of the range is based on 800 settlements and residential division EBIT of NZ$185m (NZ$136m 2H23 EBIT).

Fletcher Building (FBU): Fletcher Living Website Tracker - May Update

<ul><li>We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.</li><li>Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855m</li><li>Our tracker suggests sales rates have picked up in March which is a positive but March/April are key selling months so a pick up would be expected</li></ul>

We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website.Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855mOur tracker suggests sales rates have picked up in March which is a positive but March/April are key selling months so a pick up would be expected

Fletcher Building: Fletcher Living – March Website Tracker Update

<ul><li>No surprises in the result: 1H23 EBIT grew +8% to NZ$360m with strong growth in the materials and distribution divisions offset by low home sales</li><li>Some tweeks to guidance: FBU provided some more detail on the assumptions behind the NZ$800–855m FY23 EBIT guidance range</li><li>Free cash flow remains low: Net debt increased +NZ$660m to NZ$1.4b largely due to the NZ$200m of residential development land purchases, c.NZ$100m housing WIP inventory rebuild, and NZ$300m of capex and growth initiatives</li></ul>

No surprises in the result: 1H23 EBIT grew +8% to NZ$360m with strong growth in the materials and distribution divisions offset by low home salesSome tweeks to guidance: FBU provided some more detail on the assumptions behind the NZ$800–855m FY23 EBIT guidance rangeFree cash flow remains low: Net debt increased +NZ$660m to NZ$1.4b largely due to the NZ$200m of residential development land purchases, c.NZ$100m housing WIP inventory rebuild, and NZ$300m of capex and growth initiatives

Fletcher Building: 1H23 Result — A Formality

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)

Fletcher Building: FY23 Investor Day — Relatively Level

There was no significant positive or negative surprises at Fletcher Building's (FBU) investor day; FY23 EBIT guidance was reduced to NZ$800m, the...

Forsyth Barr

Building Materials: Govt Agrees With ComCom Recommendations

The government has released its response to the recommendations made by the Commerce Commission (ComCom) following its market study into the...

Forsyth Barr

Fletcher Building (FBU): Fletcher Living Website Tracker - May Update

We have updated our tracker of homes for sale on Fletcher Building’s (FBU) Fletcher Living website; Home sales are a key swing factor in FBU’s...

Forsyth Barr

Fletcher Building: Fletcher Living – March Website Tracker Update

Home sales are a key swing factor in FBU’s FY23E EBIT guidance of NZ$800-855m; the top end of the range is based on 800 settlements and residential...

Forsyth Barr

Fletcher Building: 1H23 Result — A Formality

Given Fletcher Building (FBU) pre-announced its 1H23 on Monday, today's result announcement was largely a formality; New information included...

Forsyth Barr

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