Shares in Fletcher Building have begun another slide after losing more than $2 billion in market capitalisation during the past year.
The slow start to Christchurch's earthquake rebuild, where Fletcher is the lead contractor, has prompted a switch of scrutiny to Australia for its future earnings emphasis.
Fletcher shares in mid-April last year were at $9.38, then steadily slid to $5.81 in mid-January before rebounding to $6.99 late last month. Theyhave since declined more than 11% to trade around $6.19 on Thursday.
Craigs Investment Partners broker Peter McIntyre said the latest decline came on the back of the Reserve Bank of Australia saying it will hold interest rates, followed by negative Australian building data.
"The New Zealand building numbers have been patchy.
"While there will eventually be profitability for Fletcher to come out of Christchurch, there are more earnings [to be had] in Australia," Mr McIntyre said.
However, new dwelling consents for February in Australia fell by 18% compared with a year ago, and construction activity declined during the fourth quarter.
Earlier this week, separate data showed business confidence up while household employment confidence was down, but both outcomes were linked to the construction and housing sectors.
Both surveys were concerned about the reliance on those sectors and their abilities to underpin economic recovery.
Mr McIntyre said many shareholders had held on for Fletcher to pay out its dividend. Others were considering buying while the stock was so low, but more were beginning to exit Fletcher post-dividend.
For Fletcher's six months trading to December, reported in early February, it was again forced to downgrade its full-year after-tax profit guidance, expecting to be 5% to 14% lower to between $310 million to $340 million.
While Fletcher's revenue for the six months was boosted 30% beyond $4.5 billion from its acquisition of Australian Crane group, restructuring costs elsewhere saw it book a 13% decline in after-tax profit, down 13% from $166 million to $144 million.
Fletcher chief executive Jonathan Ling said at the time the Christchurch rebuilding was gaining momentum, but more slowly than anticipated because of quakes last December.
As at February, there were 1000 contracting companies with 11,000 staff doing between $30 million and $50 million worth of work each month, he said.
