Fletcher Building shareholders back $273m construction sale — but they want more
Fletcher's management has won praise for moving quickly to seal the $273 million sale to Paris-listed Vinci, but investors say tougher tests still lie ahead.
Shareholders of troubled Auckland-based conglomerate Fletcher Building have welcomed the NZD316 million ($273 million) sale of its construction division to Paris-listed Vinci Construction, but say further divestments will be required to turn the company’s fortunes around.
The construction division has been plagued by delays and lawsuits in recent years, while the broader business has continued to face margin pressure and compression amid a challenging New Zealand construction market.
Milford equities analyst Jeremy Hutton said the divestment marked a “step in the right direction” for Fletcher’s simplification strategy.
“They’ve managed to deliver [the divestment] in good time, quicker than people were expecting, and the price is in line with what people were expecting,” said Hutton, whose fund is a longstanding investor in Fletcher.
