NZSE:FBU

Stock Analysis Report

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Executive Summary

Fletcher Building Limited, together with its subsidiaries, manufactures and distributes building products in New Zealand, Australia, North America, Asia, Europe, and internationally.


Snowflake Analysis

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Fletcher Building's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FBU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.0%

FBU

-3.1%

NZ Basic Materials

2.6%

NZ Market


1 Year Return

-32.9%

FBU

-4.5%

NZ Basic Materials

3.3%

NZ Market

Return vs Industry: FBU underperformed the NZ Basic Materials industry which returned -4.5% over the past year.

Return vs Market: FBU underperformed the NZ Market which returned 3.3% over the past year.


Shareholder returns

FBUIndustryMarket
7 Day-6.0%-3.1%2.6%
30 Day-15.0%-4.0%4.1%
90 Day-2.8%31.9%16.0%
1 Year-30.6%-32.9%-1.5%-4.5%8.1%3.3%
3 Year-49.5%-55.5%-9.3%-18.9%44.7%22.6%
5 Year-46.2%-57.4%6.7%-12.3%98.4%45.2%

Price Volatility Vs. Market

How volatile is Fletcher Building's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fletcher Building undervalued compared to its fair value and its price relative to the market?

42.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FBU (NZ$3.46) is trading below our estimate of fair value (NZ$6.03)

Significantly Below Fair Value: FBU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FBU is good value based on its PE Ratio (15.7x) compared to the Basic Materials industry average (25.8x).

PE vs Market: FBU is good value based on its PE Ratio (15.7x) compared to the NZ market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: FBU is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: FBU is good value based on its PB Ratio (0.8x) compared to the XO Basic Materials industry average (1.1x).


Next Steps

Future Growth

How is Fletcher Building forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

23.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FBU's forecast earnings growth (23.4% per year) is above the savings rate (2.6%).

Earnings vs Market: FBU's earnings (23.4% per year) are forecast to grow faster than the NZ market (8.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FBU's revenue is expected to decline over the next 3 years (-1.7% per year).

High Growth Revenue: FBU's revenue is forecast to decline over the next 3 years (-1.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FBU's Return on Equity is forecast to be low in 3 years time (4.8%).


Next Steps

Past Performance

How has Fletcher Building performed over the past 5 years?

-23.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FBU has a large one-off loss of NZ$129.0M impacting its December 31 2019 financial results.

Growing Profit Margin: FBU's current net profit margins (2.3%) are lower than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: FBU's earnings have declined by -23.8% per year over the past 5 years.

Accelerating Growth: FBU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FBU had negative earnings growth (-3.1%) over the past year, making it difficult to compare to the Basic Materials industry average (-50.2%).


Return on Equity

High ROE: FBU's Return on Equity (5.2%) is considered low.


Next Steps

Financial Health

How is Fletcher Building's financial position?


Financial Position Analysis

Short Term Liabilities: FBU's short term assets (NZ$3.2B) exceed its short term liabilities (NZ$1.7B).

Long Term Liabilities: FBU's short term assets (NZ$3.2B) exceed its long term liabilities (NZ$2.9B).


Debt to Equity History and Analysis

Debt Level: FBU's debt to equity ratio (35.2%) is considered satisfactory.

Reducing Debt: FBU's debt to equity ratio has reduced from 55.2% to 35.2% over the past 5 years.

Debt Coverage: FBU's debt is not well covered by operating cash flow (19.6%).

Interest Coverage: FBU's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Fletcher Building current dividend yield, its reliability and sustainability?

3.85%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate FBU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate FBU's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FBU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FBU's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: FBU is not paying a notable dividend for the NZ market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FBU's dividend in 3 years as they are not forecast to pay a notable one for the NZ market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Ross Taylor (58yo)

2.67yrs

Tenure

NZ$5,302,570

Compensation

Mr. Ross H. Taylor has been the Chief Executive Officer at Fletcher Building Limited since November 22, 2017. Mr. Taylor joined the Board as an Executive Director in December 2004 of Lend Lease Corp. Ltd.  ...


CEO Compensation Analysis

Compensation vs Market: Ross's total compensation ($USD3.48M) is above average for companies of similar size in the NZ market ($USD1.16M).

Compensation vs Earnings: Ross's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ross Taylor
Chief Executive Officer2.67yrsNZ$5.30m0.12% NZ$3.5m
Bevan McKenzie
Chief Financial Officer3.67yrsno data0.027% NZ$767.3k
Dan Beecham
Chief Information Officer0.42yrno data0.0019% NZ$55.2k
Aleida White
Head of Investor Relationsno datano datano data
Andrew Clarke
Group General Counsel & Company Secretary0.83yrno data0.0067% NZ$190.5k
Leela Gantman
Head of Communicationsno datano datano data
Claire Carroll
Chief People & Communications Officer2yrsno data0.012% NZ$350.0k
Dean Fradgley
Chief Executive of Australian Division4.92yrsno data0.036% NZ$1.0m
Steve Evans
Chief Executive of Residential & Development5.5yrsno data0.034% NZ$960.1k
Wendi Croft
Chief Health & Safety Officer2yrsno data0.0030% NZ$84.4k

2.3yrs

Average Tenure

Experienced Management: FBU's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Crowley
Independent Non-Executive Director0.75yrno data0.0024% NZ$69.1k
Robert McDonald
Independent Non-Executive Director1.83yrsNZ$157.24k0.0061% NZ$173.1k
Martin Brydon
Independent Non-Executive Director1.83yrsNZ$153.10k0.0024% NZ$69.1k
Barbara Chapman
Independent Non-Executive Director1.83yrsNZ$146.66k0.0024% NZ$69.1k
Bruce Hassall
Independent Non-Executive Chairman1.83yrsNZ$333.42k0.0027% NZ$77.0k
Douglas McKay
Independent Non-Executive Director1.83yrsNZ$165.51k0.0024% NZ$69.1k
Cathy Quinn
Independent Non-Executive Director1.83yrsNZ$153.85k0.0037% NZ$103.8k

1.8yrs

Average Tenure

64yo

Average Age

Experienced Board: FBU's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Fletcher Building Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fletcher Building Limited
  • Ticker: FBU
  • Exchange: NZSE
  • Founded: 1909
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: NZ$2.843b
  • Shares outstanding: 821.68m
  • Website: https://fletcherbuilding.com

Number of Employees


Location

  • Fletcher Building Limited
  • 810 Great South Road
  • Penrose
  • Auckland
  • 1061
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FBUNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDMar 2001
FBUASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMar 2001
FRCE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2001
FLQDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2001
FBUCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMar 2001
FCRE.YOTCPK (Pink Sheets LLC)SPONS ADR NEWUSUSDNov 2010

Biography

Fletcher Building Limited, together with its subsidiaries, manufactures and distributes building products in New Zealand, Australia, North America, Asia, Europe, and internationally. It operates through Building Products, Distribution, Steel, Concrete, Residential and Development, Construction, and Australia segments. The Building Products segment manufactures, markets, distributes, and sells building products used to build homes, buildings, and infrastructure, including insulations, plasterboards, laminate surfaces, and plastic and concrete piping for the commercial and residential markets. The Distribution segment distributes building, plumbing, and pipeline products under the PlaceMakers, Mico, Forman Building Systems, and Snappy brands. The Steel segment manufactures and distributes steel products. The Concrete segment engages in the extraction of aggregates, and production of cement and concrete. The Residential and Development segment builds residential homes; and develops and sells primarily commercial sites. The Construction segment builds and maintains public and commercial buildings, transport and utilities infrastructure, and buildings and infrastructure, as well as designs, constructs, and maintains roads and civil infrastructure. The Australia segment manufactures and distributes building materials, such as insulation, plasterboard, laminate surfaces, steel roofing, and plastic and concrete piping for a range of industries across Australia. It also operates approximately 225 retail sites. The company was founded in 1909 and is headquartered in Auckland, New Zealand. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/08 10:33
End of Day Share Price2020/07/08 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.