Fletcher Rise Most in Two Years on Earnings Forecast
The stock rose 3.7 percent to NZ$7.65 at the 5 p.m. close, its biggest gain since Sept. 6, 2010. It earlier climbed to as high as NZ$7.70. Operating earnings will rise as much as 22 percent in the year ending June with a stronger second-half, Auckland-based Fletcher said in a statement today.
The forecast is underpinned by rebuilding in the earthquake-wrecked city of Christchurch as seismic activity eases and housing demand is boosted by the return of insurance companies writing new policies, Fletcher said. New home construction in Auckland, New Zealand’s biggest city, and government spending will also help, the company said.
“The board believe that this is achievable, on the basis of the momentum seen in New Zealand recently which is expected to continue for the whole of the year,” Chairman Ralph Waters said in the statement.
The Christchurch earthquake killed 185 people in February 2011. The demolition of the city center, which was wrecked in the 6.3-magnitude temblor, should be completed by the middle of next year, Waters said.
Declines in new housing in Australia, where the company got 47 percent of sales last year, could affect the forecast, it said. The company plans to reduce capital spending by about NZ$100 million ($82 million) in the coming year, according to the statement.
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