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Are the green shoots of humility emerging at Fletcher Building?
Annual Meeting Report, October 22nd 2024 Click here for NZSA Assessment and Voting Intentions Metric2021202220232024ChangeRevenue$8,120m$8,498m$8,469$7,683m2-9%NPAT$305m$432m$254m-$227m3n/aGross Margin Pct29%30%31%28%-9%Inventory Turnover4.814.453.733.812%EPS1$0.371$0.552$0.30-$0.11n/aPE Ratio20915n/a Capitalisation$5.9b$4.0b$3.6b$2.4b-34%Current Ratio1.591.521.511.531%Debt Equity1.151.241.471.6713%Operating CF$889m$592m$388m$398m3%NTA Per Share1$3.12$3.38$3.10$2.90-6%Dividend Per Share1$0.30$0.40$0.34$0.00n/a 1 per share figures based off actual shares at balance date (not weighted average)2 note that prior years include Tradelink, which is treated as a discontinued operation in FY24 and therefore not included in revenue.3 excluding Tradelink, was -$79m....
Capital Raise – a tough time for retail investors?
NZSA Disclaimer Over the last week, we have seen announcements of capital raise from both Auckland Airport (AIA) and - earlier today - Fletcher Building (FBU). Both have elements that are uncomfortable for retail investors who are unable (or unwilling) to participate. NZSA has long advocated - and prefers - a renounceable, pro-rata structure. We do consider extenuating circumstances - such as those facing the...
Retail shareholders swallowing dead rats at Synlait
NZSA Disclaimer The recent announcement of the long awaited capital raise by Synlait represents an effective end-game for the future of Synlait as a listed investment opportunity for New Zealand shareholders. There is no doubt that a capital raise is required, as part of a wider restructure of a balance sheet that has is punch-drunk from the impacts of poor investment decisions, debt funding and...
Andrew Reding and the phenomenon unique to NZ
NZSA Disclaimer The appointment of Andrew Reding as CEO of Fletcher Building Limited (FBU) is cause for celebration. However, this event may signify something more profound – a pattern that speaks to the core of New Zealand's identity and values. Andrew Reding, John Hawkins, and I, Bruce Sheppard, share a remarkable commonality. We are all past Chairs of the New Zealand Shareholders Association (NZSA), and...
NZX and Catalist: The ‘likes’ and the differences
NZSA Disclaimer The author is the Head of Regulation at Catalist Public Market. All opinions expressed within this article are solely the author’s and do not reflect the opinions, beliefs or positions of Catalist. From an NZSA perspective, this is a topic we are interested in simply as a means of striking a better balance between investor protection and issuer regulation when companies with retail...
Takeover interest on an under-valued NZX
NZSA Disclaimer Monday July 22nd was a busy day on our local market. First came the announcement that the directors of Arvida Limited (NZX: ARV) were recommending an offer for a takeover via a Scheme of Arrangement at $1.70 per share - well up on a share price that had become range-bound between $0.90 - $1.00 over the last 6 months. This was followed shortly...
Putting the Steel into future returns…
NZSA Disclaimer This is an interview with Mark Malpass, CEO, Steel & Tube, carried out on June 19th 2024. Listen in for his thoughts on Steel and Tube's past, present and future - and the value of good governance. Oliver Mander...
When the rock of directors judgement meets the hard place of auditing standards…
NZSA Disclaimer Auditors play a key role in providing shareholders with assurance as to the reporting surrounding their investment. From an investor perspective, there is plenty to take away from an audit report; the handy summary of "Key Audit Matters" (KAM's) is a helpful guide to determining what matters when it comes to a company's financial statements. There's often a degree of conflation between the...
Reflections on an IoD Conference topic: have Boards lost control?
NZSA Disclaimer Oliver Mander was a panellist at the IoD conference focusing on this topic. The conference was conducted under 'Chatham House rules' - so while this article reflects the author's thoughts, it does not necessarily reflect the full panel discussion. If you're interested in some of the views from the panel, check out this LinkedIn video shot immediately after the session. There has been...
Tick tock – but value should trump speed when it comes to Rakon
NZSA Disclaimer There's been plenty of media and shareholder comment around the non-binding indicative offer received by Rakon Limited. A non-binding indicative offer (NBIO) was announced by Rakon to the market way back on December 11th 2023 - the announcement detailed the price ($1.70), that the bidder was 'credible' and disclosed that the NBIO had been received by the Board on December 7th. Tellingly, though,...
Has Burger Fuel met the key tests that support a Scheme of Arrangement?
NZSA Disclaimer Any shareholder in Burger Fuel is likely to be aware of the challenge received to the company's proposed capital return by Burger Fuel's founder (and 5% shareholder) Chris Mason. The parties (including NZSA) had their day in Court on May 8th; while there was universal agreement on the key tests required to achieve a capital return, there was clear disagreement surrounding the extent...
The value of courage in decision-making…
NZSA Disclaimer Listen below to this short interview with Abby Foote, NZSA's 2023 Beacon Award winner to hear more about her views on courage, success and diversity of thought - and the value that can add to a Board. Our announcement last week recognised Abby Foote for two specific issues arising during 2023, relating to the stance she adopted in relation director independence at Sanford...
Creating a level playing field for listed companies
NZSA Disclaimer NZSA plays a key role in advocating for the rights of individual investors in New Zealand's public markets. That much is well-known, recognised by individual shareholders, directors and others in the investment community. At a fundamental level, however, our work assumes that individuals have choice when it comes to investment. And indeed, most New Zealanders have indeed enjoyed an increasing choice of both...
Be wary of the ‘vibes’
NZSA Disclaimer This article, written by Jedrzej Bialkowski and Moritz Wagner from the University of Canterbury is republished from The Conversation under a Creative Commons license. Read the original article. NZSA has a longstanding relationship with UC when it comes to researching investor sentiment. Positive investor sentiment doesn’t necessarily match the true value of stocks Jedrzej Bialkowski, University of Canterbury and Moritz Wagner, University of Canterbury...
Part 1: Property investment options for Kiwis – removing the rose-tinted glasses
NZSA Disclaimer Property investment has a long and storied history in New Zealand. It's a sector that has thrived in the low-interest rate environment enjoyed by New Zealanders over the last decade and supported by our clear requirement for additional housing and higher-quality commercial property assets. The last few years, however, have seen some cracks emerge, particularly amongst 'unlisted' property funds and syndicates. Many will...
Is this a ‘managed PR retreat’ for Agria in PGG Wrightson?
NZSA Disclaimer Guanglin “Alan” Lai probably thought it was in the bag. After all, with Agria's 44.3% shareholding, it would be tough to overturn a proposal (announced on February 13th) to remove three independent directors from the Board and elect three new independent directors, plus himself. Yet, the recent action by Agria in flexing its muscle to force Board change at PGG Wrightson (PGW) highlights...
Why don’t more women invest? You’re asking the wrong question
NZSA Disclaimer I’ve just finished watching the latest True Detective series where the constant refrain from the hard-bitten Alaskan cop played by Jodie Foster was: “Ask the question. Nope, wrong question” until she got to the heart of the matter. It came to mind when I was recently asked to speak to women about investing at a series of events this month. One of the...
With shareholders like this, who needs enemies?
NZSA Disclaimer While most of the New Zealand investment community were agog at the events impacting a certain building materials company, an announcement made to market by PGG Wrightson (NZX: PGW) late on February 13th caught NZSA's attention. It seems that PGW's 44% shareholder Agria is seeking a special meeting to remove three of the independent directors of PGW, appoint (another) one of their own...
Will resignations cap a decade of disaster for shareholders at FBU?
NZSA Disclaimer It has been a decade of disaster for Fletcher Building (NZX: FBU) shareholders. Much has been said about Fletcher Building this week, including NZSA's own commentary both in the media and via the NZSA blog article (It's just a flesh wound...) early in the week. Of course, it isn't the first time we have been critical of governance at Fletcher Building. As recently...
It’s just a flesh wound…
NZSA Disclaimer This scene from Monty Python has indeed set the tone for the events that have played out at Fletcher Building (NZX: FBU) over the last week. Unfortunately, however, the brave and beleaguered 'Black Knight' made famous by the Monty Python sketch represents not just the company itself, but the many thousands of shareholders who have lost their financial limbs. Just how many wounds...
Proposed trust tax increase a further nail in the coffin for individual shareholders
NZSA Disclaimer Back in July 2023, the due date for responses to one of the previous government's lesser-publicised bills was coming up fast. It was Mataraki weekend - the new public holiday to recognise the Māori New Year. Clearly, it wasn't a holiday that meant much to the Finance and Expenditure Select Committee, with consultation responses for the Taxation (Annual Rates for 2023-24, Multinational Tax,...
Will fast food give shareholders a bad case of gout?
NZSA Disclaimer At a Special Meeting held on December 14th, shareholders of Burger Fuel approved a special resolution for the return of capital to shareholders. Or did they...?A deeper analysis of the shareholder voting results gives a slightly different picture as to the outcome. The 'raw' vote by shareholders is shown in the image below: When taking into account the majority shareholding held by associated persons...
A few highlights from 2023…
NZSA Disclaimer As I write this final (short) article for 2023, I am enjoying a 30-degree day with a swimming pool nearby. Holiday mode is very close to setting in. And yet for many, 2023 has been a difficult year. The impacts of rising interest rates have been felt by all, with the resultant slowdown in consumer spend and cutbacks by businesses to suit dwindling...
An interview with Mark Heine, EROAD CEO
NZSA Disclaimer Hear from Mark Heine, EROAD CEO. Mark talks to range of issues relating to EROAD in a wide-ranging conversation covering everything from EROAD's underlying sources of value for the business, the company's response to technology commoditisation and much much more. Oliver Mander...
Good Spirits leaves a bad taste
NZSA Disclaimer Good Spirits Limited (NZX: GSH) is soon to be delisted. After 19 years, investors have been close to wiped out as Good Spirits became burdened with debt to the point of effective insolvency. With the final chapter nearly complete, I thought it was worth delving into the past to understand what went wrong and to see if there were any takeaways we can...