Fletcher Building, New Zealand's largest listed company,
reports its half-year results today with New Zealand and
Australia's economies at the forefront of analysts' scrutiny.
With its earnings out of Australia high, and being lead
contractor in the overall $40 billion rebuild in Canterbury,
Fletcher's year ahead will be signposted by construction
Forsyth Barr broker Andrew Rooney expected Fletcher to report
a 21% increase in underlying earnings before interest and
tax, (ebit) up at $316 million, driven by sustained business
momentum in New Zealand.
''Sustained growth in domestic activity levels will drive
group profitability again,'' he said.
In Australia, the building industry was enjoying a cyclical
upswing, but the structural shift to building apartments or
multi-family dwellings meant approvals for detached
residential homes was only slowly ''grinding higher at
This week, Fletcher announced it intended to sell its Pacific
Steel business to Bluescope Steel for $120 million, which was
welcomed by brokers, given it was not a core Fletcher
Craigs Investment Partners broker Peter McIntyre said
although Canterbury was expected to provide a lot of work
during the next five years, construction data from Australia
was showing more promise.
He expected strong growth, at ebit level, across all
Fletcher's divisions, saying the expectation of a positive
result had driven its shares up 9% during the past month, to
trade around $9.70 yesterday.