Fletcher: Corporate Action–Recommend Participating in Equity Raise

No-moat Fletcher Building is raising NZD 700 million as new Chief Executive Andrew Reding shores up the balance sheet. While fiscal 2024 net debt/adjusted EBITDA was at the top end of the company’s target range of 1 to 2 times, the equity raise was unexpected. At the fiscal 2024 earnings result, management expressed interest in a partial sale of the residential and development business, likely retaining some ownership while a partner runs the business. But with limited buyers in New Zealand and longer approvals for overseas buyers, the process appears likely to be more protracted than the company desires.