The past year for the construction sector has been tough, with historical lows in residential and commercial building activity. With Fletcher Building delivering its full-year result on Wednesday, business reporter Simon Hartley looks at the sector with Craigs Investment Partners broker Peter McIntyre and Forsyth Barr broker Tony Conroy.
Claims through an anonymous email circulating the country that the mainstay company of the Christchurch earthquake demolition and rebuilding, Fletcher Building, has been taken over as a state-owned enterprise holds no credence, according to stockbrokers.
Fletcher Building's forecast profit for the full-year 2012 has been downgraded over concern the New Zealand and Australian residential housing markets will remain soft and the rebuilding in Christchurch will begin later than expected.
Fletcher Building is expecting a revenue boost to almost $10 billion for its full-year result, in the wake of its successful more-than-$1 billion takeover of Australian company Crane Group.
Fletcher Building yesterday warned shareholders to treat with caution an offer for their shares by Fairfield Securities, a company associated with businessman Bernard Whimp.
Fletcher Building has snared a majority 51.9% stake in its hostile takeover bid for rival Crane Group, a plumbing supplies and plastic pipeline-maker in Australia.
The economic disruption to Christchurch after last week's earthquake has prompted Fletcher Building to issue a profit downgrade - potentially $14 million to $24 million lower than previous guidance.
Fletcher Building is expected to deliver an increased after-tax profit of about 20% - between $160 million and $185 million - and a dividend boost, when it reports its half year to December result today.
Fletcher Building shares hit a three-month high yesterday as investors flocked to the stock, emboldened by the likelihood of a successful takeover of Australian competitor Crane Group.
Fletcher Building will have to increase its takeover offer for Australian building supply company Crane Group after directors rejected its initial bid, brokers say.
