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 (00:00):
And Shane solely harbor asset management is with us as
Shane ill likely that all right? So what did you
make of the economic data out today?

Speaker 2 (00:07):
Yeah, unfortunately is the 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
so that means the services sector still contracting, our economy
still struggling. The Grant gain traction net migration for August

(00:29):
was a whole four hundred and sixty people, well below
the rate of two thousand seen in June and July.
Other side, we're seeing a little bit of improvement and
tourism short term visitors up serre 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

(00:49):
many in that international tourism still a bit of a
drag on the economy. Good news is all of airline
representas in New Zeon. They're saying international services coming in
the next six months, they're going to see us starting
to grow again, so touris could be starting to boost
the economy. And if we're here, if we look forward twelve.

Speaker 1 (01:03):
Months, Wow, what do the market make By the way
of today's Fletcher Building a quarterly update.

Speaker 2 (01:08):
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 materials really dropped away. Some margin

(01:29):
had two in terms of some things like some of
the retail parts their business things a bit of pressure.
Fletcher Building are pretty cautious outlook statement from management talking
about market conditions remaining challenging for the rest of twenty
twenty six given this 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

(01:49):
of cost savings with fifty mils in the first half. Unfortunately,
the Fletcher Building ship ice down two percent on the
data three dollars twenty two.

Speaker 1 (01:57):
And precing property I announced that new equity cap all
raised today. What is the take on that.

Speaker 2 (02:02):
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 and 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 Orban's Queen Street. About two and
eighty five mil. Heather was raised by institutional investors at

(02:25):
a dollar twenty three. It's been pretty well supported retail
the 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 shy market. I'm rtually the market
down zero point eighty five percent on a combo of
all the above.

Speaker 1 (02:43):
Shane, it's good to talk to you mate, Thanks very
much for running us through the Shane Sally Harbor Asset Management.
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