Why the Fletcher Building (ASX:FBU) share price could shoot higher today

The Fletcher Building Limited (ASX:FBU) share price will be in focus today after delivering a strong half year result this morning…
The post Why the Fletcher Building (ASX:FBU) share price could shoot higher today appeared first on The Motley Fool Australia. –

woman throwing arms up in celebration whilst looking at asx share price rise on laptop computer

The Fletcher Building Limited (ASX: FBU) share price will be in focus on Wednesday following the release of its half year results.

In early trade in New Zealand, the company’s NZX-listed shares are up 3%.

How did Fletcher Building perform in the first half?

For the six months ended 31 December, Fletcher Building reported a 1% increase in revenue over the prior corresponding period to NZ$3,987 million.

Positively, things were much better for the building products company’s earnings.

It reported earnings before interest and tax (EBIT) growth of 47% to NZ$323 million. And on the bottom line, Fletcher Building reported a 48% jump in net profit after tax to NZ$121 million.

Management advised that this improvement in its profitability was the result of initiatives undertaken to improve operating disciplines and efficiencies.

The company’s operating cash flows were also strong and came in at NZ$428 million. This allowed the Fletcher Building board to declare an interim dividend of 12 NZ cents per share.

Management commentary

Fletcher Building’s Chief Executive, Ross Taylor, commented: “Our strong HY21 results reflect good progress made on our strategy to drive consistent performance and growth. The improved earnings and profitability are the outcome of initiatives undertaken over the past three years to improve operating disciplines and efficiencies across the Group.”

The Chief Executive revealed that trading conditions have been mixed but stable.

He explained: “We have seen a broadly stable market environment. Growth in the New Zealand residential sector has been offset by softer demand in Commercial and mixed conditions in infrastructure in both New Zealand and Australia.”

“In all businesses, we have remained focused on executing our strategy, especially improving the underlying disciplines and efficiencies of our operations. The sustainable improvement in margins was achieved through pricing disciplines; targeted share gains; consolidation and automation of manufacturing and supply chains; and a more efficient overhead cost base,” he added.


Management appears confident there will be more of the same in the second half.

Mr Taylor said: “Current indicators point to core volumes in NZ and Australia remaining at present levels through the second half, with robust demand for Residential housing in NZ. This market outlook assumes no material impact from COVID-19.”

It has provided FY 2021 EBIT before significant items guidance of NZ$610 million to NZ$660 million. This compares very favourably to EBIT before significant items of NZ$160 million in FY 2020.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Fletcher Building (ASX:FBU) share price could shoot higher today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!