Shane Solly: Harbour Asset Management expert on Fletcher Building posting a 'gloomy' quarterly update

Fletcher Building's issued a gloomy trading update, marked with trading slumps, market falls and low sales volumes.

The company's now aiming for a further $100 million dollars in cost cuts.

Harbour Asset Management's Shane Solly explains further.

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio.

Speaker 2 (00:16):
And Shane solely harbor Asset Management is with us as
Shane ill like you.

Speaker 3 (00:20):
That all right?

Speaker 2 (00:21):
So what did you make of the economic data out today?

Speaker 3 (00:23):
Yeah, unfortunately is a more self data. We saw the
New Zealand Performance Service Indextens, a lead indicator for service
sector in New Zeon. It was up to forty eight
point three in September from forty seven point five in July,
which is good, but it's still below fifty. But that's
that means the services sector still contracting. Our economy is
still struggling. The Grant gain traction net migration for August

(00:45):
was a whole four hundred and sixty people, well below
the rate of two thousand and seen in June and July.
Other side, we're seeing a little bit of improvement and tourism.
Short term vis is up stre and a half percent
and August net was up. July was also positive, So
we are still lagging though they visiting numbers, we're still
at ninety one point seven percent of pre COVID, so

(01:05):
many in that international tourism still a bit of a
drag on the economy. Good news is Bord of Airline
Representatsu is on. They're saying international services coming in the
next six months. They're going to see us starting to
grow again. So tourism could be starting to boost the
economy again. If we're here, if we look forward twelve.

Speaker 2 (01:20):
Months, Wow, what does the market make? By the way
of today's Fletcher Building a quarterly update.

Speaker 3 (01:25):
Yeah, unfortunately a bit of below expectations. The first quarter
for Fletcher Building. The light building products were weaker than expected. Sorry,
they're slightly better than the fourth quarter of twenty twenty five,
but below expectations. Heavy building that was the real hip.
That was where the material has really dropped away. Some

(01:45):
margin had two in terms of things like some of
the retail parts their business things. A bit of pressure.
Flitcher Building a pretty cautious outlook statement from management talking
about market conditions remaining challenging for the rest of twenty
twenty six given us uncertainty of time when they recovery
and residential sector. They have gone another notch in terms
of cost saving. They're now targeting another one hundred million

(02:06):
of cost savings with fifty mil and the first half Unfortunately,
the Fletcher Building ship price down two percent on the
data three dollars twenty two.

Speaker 2 (02:13):
And pre sing property. I announced that new equity capital
raise today. What is the take on that?

Speaker 3 (02:19):
Yeah, look, it's actually been taken pretty well by the market.
They're raising three hundred and ten million dollars to really
help kickstart their three point seven b in development portfolio.
Some of the three hundred mil will be used to
fund a six hundred and thirty eight bid purpose built
student accommodation building in Orpen's Queen Street. About two and
eighty five mil. Heather was raised by institutional investors at

(02:41):
a dollar twenty three. It's been pretty well supported retailing listeners.
They've got the opportunity to buy into the share purchase
plan at the same price if they own shares before
the announcement today. So yeah, big, big day for the
New Zealand share market. I've watually the market down zero
point eighty five percent on a combo of all the above.

Speaker 2 (02:59):
Shane, it's good to talk to you mate, Thanks very
much for running us through the Shane Sally Harbor Asset Management.

Speaker 1 (03:04):
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