Fletcher Building Fails to Secure Covenant Waivers; FVE Unchanged, but Uncertainty Now Very High
No-moat Fletcher Building announced it failed to secure waivers on its breached debt covenants by the previously targeted end of March, and instead will look to renegotiate terms with its lenders by May 31. While this news doesn’t have an impact on our near-term outlook for the operations of the business--management reiterated its guidance for a NZD 660 million EBIT loss in the construction segment, in line with our forecast--we’ve moved our uncertainty rating to Very High given the wide band of...Fletcher Building is a holding company. Through its subsidiaries, Co. operates in six divisions: Heavy Building Products, which manufactures, distributes and markets heavy construction material; Light Building Products, which manufactures a range of building products for residential and commercial markets; Laminates and Panels, which manufactures and distributes decorative surface laminates; Distribution New Zealand and Distribution Australia, which consist of building, plumbing, pipeline and steel distribution businesses in Australia and New Zealand; and Construction, which is a general contractor in New Zealand and the South Pacific and a builder of residential homes in New Zealand.
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