NZSE:FBU

Stock Analysis Report

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

Fundamentals

Good value with adequate balance sheet and pays a dividend.


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


Market Performance


7 Day Return

-2.7%

FBU

1.2%

NZ Basic Materials

0.2%

NZ Market


1 Year Return

-23.3%

FBU

-7.8%

NZ Basic Materials

18.6%

NZ Market

Return vs Industry: FBU underperformed the NZ Basic Materials industry which returned -7.8% over the past year.

Return vs Market: FBU underperformed the NZ Market which returned 18.6% over the past year.


Shareholder returns

FBUIndustryMarket
7 Day-2.7%1.2%0.2%
30 Day-8.8%-0.3%1.8%
90 Day-9.5%3.7%2.8%
1 Year-19.2%-23.3%-3.8%-7.8%23.7%18.6%
3 Year-47.9%-55.4%-6.1%-17.4%52.9%33.0%
5 Year-30.3%-46.0%40.7%13.4%105.3%59.4%

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?

28.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: FBU (NZ$4.68) is trading below our estimate of fair value (NZ$6.55)

Significantly Undervalued: FBU is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FBU is good value based on its PE Ratio (16.2x) compared to the Basic Materials industry average (21.7x).

PE vs Market: FBU is good value based on its PE Ratio (16.2x) compared to the NZ market (18.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: FBU is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: FBU is good value based on its PB Ratio (1x) compared to the XO Basic Materials industry average (1.5x).


Next Steps

Future Growth

How is Fletcher Building forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

8.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FBU's forecast earnings growth (8.3% per year) is above the savings rate (2.4%).

Earnings vs Market: FBU's earnings (8.3% per year) are forecast to grow faster than the NZ market (7.2% per year).

High Growth Earnings: FBU's earnings are forecast to grow, but not significantly.

Revenue vs Market: FBU's revenue is expected to decline over the next 3 years (-1.5% per year).

High Growth Revenue: FBU's revenue is forecast to decline over the next 3 years (-1.5%).


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: FBU's Return on Equity is forecast to be low in 3 years time (7.9%).


Next Steps

Past Performance

How has Fletcher Building performed over the past 5 years?

-27.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FBU's earnings have declined by -27.8% per year over the past 5 years.

Accelerating Growth: FBU has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: FBU has become profitable in the last year, making it difficult to compare its past year earnings growth to the Basic Materials industry (-39.3%).


Return on Equity

High ROE: FBU's Return on Equity (6.2%) is considered low.


Return on Assets

ROA vs Industry: FBU's Return on Assets is below or equal to the Basic Materials industry average last year.


Return on Capital Employed

ROCE Improving: FBU's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Fletcher Building's financial position?


Financial Position Analysis

Short Term Liabilities: FBU's short term assets (NZ$4.1B) exceeds its short term liabilities (NZ$2.3B)

Long Term Liabilities: FBU's short term assets (4.1B) exceeds its long term liabilities (1.2B)


Debt to Equity History and Analysis

Debt Level: FBU's debt to equity ratio (40.7%) is considered high

Reducing Debt: FBU's debt to equity ratio has reduced from 51.6% to 40.7% over the past 5 years.

Debt Coverage: FBU's debt is not well covered by operating cash flow (9%).

Interest Coverage: FBU's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet

Inventory Level: FBU has a high level of physical assets or inventory.

Debt Coverage by Assets: FBU's debt is covered by short term assets (assets are 2.428400x debt).


Next Steps

Dividend

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

6.41%

Current Dividend Yield


Dividend Yield vs Market

company6.4%marketbottom25%3.0%markettop25%5.6%industryaverage4.0%forecastin3Years5.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: FBU's dividend (6.41%) is higher than the bottom 25% of dividend payers in the NZ market (3.02%).

High Dividend: FBU's dividend (6.41%) is in the top 25% of dividend payers in the NZ market (5.61%)

Stable Dividend: FBU's dividend payments have been volatile in the past 10 years.

Growing Dividend: FBU's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79.8%), FBU's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FBU's dividends in 3 years are forecast to be covered by earnings (68.2% payout ratio).


Next Steps

Management

What is the CEO of Fletcher Building's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Ross Taylor (57yo)

1.9yrs

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the NZ market.

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


Management Age and Tenure

1.6yrs

Average Tenure

Experienced Management: FBU's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

1.1yrs

Average Tenure

61yo

Average Age

Experienced Board: FBU's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyNZ$35,368,37327 May 19
Perpetual Limited
EntityCompany
Shares7,043,676
Max PriceNZ$5.02
SellNZ$83,322,81327 May 19
Perpetual Limited
EntityCompany
Shares16,295,196
Max PriceNZ$5.11
SellNZ$1,110,12531 Jan 19
Perpetual Limited
EntityCompany
Shares239,942
Max PriceNZ$4.63
BuyNZ$49,977,87831 Jan 19
Perpetual Limited
EntityCompany
Shares10,664,673
Max PriceNZ$4.69
SellNZ$3,323,99818 Dec 18
The Vanguard Group, Inc.
EntityCompany
Shares489,528
Max PriceNZ$6.79
BuyNZ$9,797,62230 Nov 18
Schroder Investment Management North America Inc.
EntityCompany
Shares1,564,579
Max PriceNZ$6.26
BuyNZ$102,042,10330 Nov 18
Schroder Investment Management Limited
EntityCompany
Shares21,715,893
Max PriceNZ$4.83
SellNZ$1,276,15930 Nov 18
Schroder Investment Management North America Inc.
EntityCompany
Shares195,372
Max PriceNZ$6.53
SellNZ$20,949,17630 Nov 18
Schroder Investment Management Limited
EntityCompany
Shares3,378,662
Max PriceNZ$6.20

Ownership Breakdown


Management Team

  • Ross Taylor (57yo)

    Chief Executive Officer

    • Tenure: 1.9yrs
    • Compensation: NZ$5.30m
  • Steve Evans

    Chief Executive of Residential & Development

    • Tenure: 4.8yrs
  • Dean Fradgley

    Chief Executive of Australian Division

    • Tenure: 4.2yrs
  • Charles Bolt

    Executive Officer

    • Tenure: 0.08yrs
  • Bevan McKenzie

    Chief Financial Officer

    • Tenure: 2.9yrs
  • Leela Gantman

    Head of Communications

    • Tenure: 0yrs
  • Claire Carroll

    Chief People & Communications Officer

    • Tenure: 1.3yrs
  • Wendi Croft

    Chief Health & Safety Officer

    • Tenure: 1.3yrs
  • Aleida White

    Head of Investor Relations

    • Tenure: 0yrs
  • David Moss

    Chief Information Officer

    • Tenure: 0.08yrs

Board Members

  • Steve Vamos (61yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: NZ$181.30k
  • Peter Crowley

    Independent Non-Executive Director

    • Tenure: 0yrs
  • Rob McDonald

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: NZ$157.24k
  • Martin Brydon (63yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: NZ$153.10k
  • Barbara Chapman (59yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: NZ$146.66k
  • Tony Carter (61yo)

    Independent Non-Executive Director

    • Tenure: 9.1yrs
    • Compensation: NZ$183.55k
  • Bruce Hassall

    Independent Non-Executive Chairman

    • Tenure: 1.1yrs
    • Compensation: NZ$333.42k
  • Doug McKay (64yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: NZ$165.51k
  • Cathy Quinn

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: NZ$153.85k

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$3.954b
  • Shares outstanding: 841.19m
  • 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 Bu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 10:30
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
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.