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25 Feb 2018 15:10
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  •   Home > News > Business

    NZ shares dragged lower by Fletcher losses

    Shares were mixed as Fletcher Building plunged 9.3 per cent after the company unveiled further provisions at B+I that bring losses to $952m.


    New Zealand shares were mixed on Wednesday as Fletcher Building plunged 9.3 per cent after the company unveiled further provisions at Building + Interiors (B+I) that bring two-year losses at the unit to $952 million.

    The S/NZX50 Index fell 63.42 points, or 0.8 per cent, to 8058.8. Within the index, 23 stocks rose, 20 fell and seven were unchanged. Turnover was $226 million.

    Fletcher Building fell 9.3 per cent to $7.05.

    Ralph Norris will step down as chair after the company took a further $486m provision for project losses at its B+I unit and said 14 of the unit's 73 projects, worth $2.3 billion, are loss-making or 'on watch'.

    It said it has obtained a waiver from its commercial banking syndicate after breaching the terms of its loans, and aims to finish renegotiations by the end of March.

    "The magnitude of the extension of the losses in the B+I unit has shocked the market but I'm surprised how well the share price has performed," said Peter McIntyre, investment adviser at Craigs Investment Partners.

    "Today it's trading down nearly 10 per cent, potentially the damage to the share price could have been a lot higher, and turnover has been high.

    "Whether the shareholders are in for a capital raising is questionable at the moment - they may well be. There's no doubt it is going to get downgraded, they've essentially wiped B+I off and it was an essential part of the business."

    Metro Performance Glass dropped 4.5 per cent to 85 cents and Restaurant Brands fell 2.6 per cent to $7.15.

    Infratil was the best performer, up 2 per cent to $3.14, with Investore Property rising 1.4 per cent to $1.43 and Kathmandu Holdings gaining 1.3 per cent to $2.34.

    Genesis Energy gained 0.4 per cent to $2.39. It lifted first-half earnings 28 per cent as low hydro-lake levels in the South Island boosted the company's demand for wholesale electricity.

    Synlait Milk gained 0.2 per cent to $6.62. It has signed a new five-year supply agreement for increased volumes of packaged infant formula with Bright Dairy.

    CBL remained in a trading halt at $3.17.


    NZN




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