Forum Archive Index - May 2001

["ryanrite" <ryanrite@xtra.co.nz>]

Maybe steel is being sold?
maybe it going to be taken over 4weeks to go?
Maybe there is some leadership there at last and they have a plan to turn
the company around?
Profit is up?
Maybe a buy?
----- Original Message -----
From: i_claudius <i_claudius@xtra.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Thursday, May 24, 2001 5:23 PM
Subject: [sharechat] FBU


> Any Fletcher Building experts care to comment/justify?
> I'm amazed at FBU's strenght and the lack of market critique after last
> week's announcement.
> Consider:
> WRITEOFFS
> Announced 17/05/01 $ 5m restructuring & redundancy
> $10m additional settlement costs re AXA Pacific dispute
> $50m AXA Pacific settlement
> $70m-$100m Impairment review writedowns
> Previously announced as per FLB information memo on separation from
Fletcher
> Group
>
> $110m tax benefits written off
> $ 45m restructuring & separation costs
> Hence $290m to $320m in asset writeoffs already identified..But
> wait..there's more..
> Yet another independant valuation report has been commissioned so what
> should we expect in further writedowns?
>
> Analyst reports I've seen since the 17th May briefing project a full year
> Loss to 30/06/01 ranging from $2m to $7m.DCF valuations between $2.40 to
> $2.60 and some nervous NTA valuations between $2 and $2.21.
> No guidance re maiden dividend or policy for FBU was given.
>
> So why so strong?
> -Ralph Waters in as new CEO?OK,good guy but he didn't know any much more
> about the company's status and problems than Alexander Tolde did.In fact
> considerably less.
> -potential takeover action/asset sales?GPG aint going to buy this at
> anywhere near this level.When did Ron Brierley ever pay anything
approaching
> fair value for anything?He's not going to buy this unless significantly
> discounted.As for asset sales...there are no "gems' and remember the
> incomplete writedowns referred to above.
> -Improved operating earnings?About twice the 1HY rate apparently.Fair
enough
> but they'd need to be all of that and more sustainably going forward.I'd
> like to see it demonstrated before I get too warm.And what impact of Ralph
> Waters V the "old guard" board and management from here?
> -Construction/Infrastructure Development outlook?Improving a little but
> still fragile in the near to medium term.
>
> Not too compelling at these levels IMHO.Talk me out of it.
>
> Discl: Ready to short
>
>
>
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