Since our last update in June, Fletcher Building (FBU.NZ / FBU.AX) shares continue to power ahead, up another +20%. After trading sideways over the last few years, it seems as though FBU is finally playing catch-up with the rest of the NZ stock market.
The most recent move higher has been driven by a solid annual profit result and positive earnings outlook. FBU’s net earnings before significant items were $ 418 million, 5 per cent higher than the $399 million recorded in the prior year. The result met management’s relatively optimistic targets. Particularly pleasing was a pick up in the Australia business, as over the last few years the Australian side of the business has lagged NZ, and we were looking for signs of NZ success to be mirrored in Australia. Recent moves by both the RBA and RBNZ to begin new rate easing cycles should benefit the construction sectors in both Australia & NZ, and benefit FBU’s business at the margins, in our view. A final div...
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