Fletcher Building has become a much-watched stock after a
broker presentation in Australia late last week sent the
share price down, before a small rally yesterday.
Fletcher Building can expect a large benefit from declining
funding costs when it rolls over $75 million of capital notes
in mid-March, resetting the interest rate down by 3.5%.
Investor confidence has been repaid as billions flow back
into Fletcher Building's market capitalisation, buoyed by
housing and construction in New Zealand, Australia and the
United States.
Fletcher Building shares have hit a 20-month high, but the
forecast strength of the New Zealand dollar against its
United States counterpart could erode long-term after-tax
profits.
Shares in Fletcher Building were boosted to a year high
yesterday on news earnings growth could be beyond 20% for
2013 from anticipated buoyancy in new-home construction.
Fletcher Building is picking a relatively flat trading year
for 2013 but the Christchurch rebuilding and major
infrastructure projects should underpin improving results in
2014.
Restructuring costs and low work volumes in New Zealand and
Australia soured Fletcher Building's financial result, with
its after-tax profit coming in at the lower end of guidance
and 12% down on last year.
Analysts are picking Fletcher Building - the lead contractor
of Christchurch's multibillion-dollar rebuilding - will
deliver after-tax profit at the lower end of its forecast
range of $310 million to $340 million range tomorrow.
